Active Members

Unlike other funds, there are no administrative, membership, investment, transaction, sales,  or commission fees for participating in the  RSA-1 Plan. All the money you contribute and all investment earnings are placed into your account and invested by RSA-1.

Enroll in RSA-1 at any time. Enrollment forms are available in the RSA -1 Member Handbook and also on our website here. Participants may also enroll online through Member Online Services (MOS) here.

RSA-1 is payroll deductible, making saving easy and convenient.

There is no minimum amount you must contribute each month and no fees.

Contributions may be increased,  decreased, or stopped as often as your payroll officer allows. 

Pre-Tax Accounts:

• For the Pre-Tax Account, deferring some of your income before taxes can add more savings to your retirement.
• For the Pre-Tax Account, contributing pretax dollars lowers your taxable income and reduces the amount of taxes you pay.
• Because receipt of the income for the Pre-Tax Account is deferred, the deferred income is not included in your federal or state of Alabama gross taxable income.

Roth Accounts:

• The Roth Account allows you to withdraw your contributions without taxes or penalties if certain conditions are met.
• Earnings and contributions from your Roth Account can pass on to your heirs tax-free.
• There are no Required Minimum Distributions (RMDs) from Roth Accounts.

If you are an existing member with a Pre-Tax Account and would like to add a Roth Account, you can do so easily.

Complete the RSA-1 Contribution Allocation form, deciding what percentage you want in the various investment options for your Pre-Tax Account and Roth Account. This form should be submitted to RSA-1.

Complete an RSA-1 Authorization to Defer Compensation form to restart or increase your contribution amounts. This form should be submitted to your payroll officer. 

When considering which account option to choose, you need to understand your current finances and future goals. The RSA-1 Plan gives you the choice of tax savings now with the Pre-Tax Account or tax savings later with the Roth Account. See page 6 of the RSA-1 Member Handbook for examples.

There is no minimum amount you may defer. Contributions may be in any amount desired (for example, $10, $25, $47, etc.) as long as you do not exceed the maximum deferral allowable under federal law. The amount of your contribution may be increased, decreased, or suspended as often as you wish, subject only to employer payroll requirements.

If you are making contributions to another Section 457 plan, the annual contribution maximum applies to all 457 plans. For example, if you are contributing $10,000 in 2025 to RSA-1, you are limited to a total of $13,500 (or $21,000 age 50 and over) with any other 457 plan in that calendar year. If you are contributing to a 403(b) or a 401(k), the limits to those plans will not be affected by contributions to the RSA-1 Plan.

Yes. You can contribute to both the RSA-1 Pre-Tax Account and the RSA-1 Roth Account in the same year in any proportion you choose.

A designated Roth contribution is a type of elective contribution that employees can make to the governmental 457(b) RSA-1 supplemental retirement plan.

With a designated Roth contribution, the member irrevocably designates the contribution as an aftertax contribution that is deposited into a designated Roth Account.

The employer includes the amount of the designated Roth contribution in the employee’s gross income at the time the employee would have otherwise received the amount in cash if the employee had not made the election.

It is subject to all applicable wage-withholding requirements.

An in-plan Roth conversion is a conversion from your RSA-1 Pre-Tax Account to your RSA-1 Roth Account.

Yes. You can convert any amount you would like. However, this election is irrevocable and the funds will be considered as taxable income in the tax year that the conversion was made. 

RSA-1 Plan funds are invested under the same authority and restrictions that govern investments made by the Teachers’ and Employees’ Retirement Systems. The RSA-1 Plan offers the option to invest in fixed income, equity, and/or short-term investments (STIF). The funds in the three investment options are invested as a pool. You choose how to allocate your funding among those pools.

The three investment options below are available for both the Pre-Tax and Roth Accounts.

• FIXED INCOME PORTFOLIO Invested in various debt instruments greater than one year. Examples include corporate bonds, U.S. agency obligations, government national mortgage association securities, and commercial paper.
• EQUITY PORTFOLIO Invested in an S&P 500 Index Fund which consists of 500 large capitalization stocks.
• SHORT-TERM INVESTMENT PORTFOLIO Keep in mind that STIF investments encounter less market risk than fixed income and equity because of their short duration and usually provide a lower rate of return than investments in those categories. Examples could include high-quality money market securities, U.S. Treasury bills or notes, and U.S. government agency notes with a maturity of one year or less. Although this investment option seeks to preserve the value of your investment, it is possible to lose money by investing in the fund.

The fixed income, equity, and STIF portfolios are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

The RSA-1 Plan is not a savings account from which you make periodic withdrawals. Rather, it is a retirement plan that is available only after you have either retired or otherwise terminated employment. The withdrawal must be a bona fide severance of employment, with no prearranged reemployment.

RSA-1 Plan funds cannot be assigned or alienated.

Current IRS regulations require that distributions begin no later than April 1 of the calendar year following the calendar year in which the employee attains age 73 or retires, whichever is later.

You may withdraw your account when you meet one of the following conditions:

• 1. Separation from service through retirement or termination from employment
• 2. Attainment of age 70½
• 3. Unforeseeable emergency (Contact RSA-1  for more information.)
• 4. Small balance distribution (Contact RSA-1  for more information.)

With the exception of Required Minimum Distributions (RMDs), the following distribution elections are permitted only upon retirement or other termination of service.

The balance of the account(s) will include earnings calculated daily. You may leave the balance in your account until you request a distribution or you retire or terminate service and reach age 73 when it might be necessary to start the RMD (Pre-Tax Account only). At the time of retirement or separation from service, you may choose one or a combination of the following distribution elections:

Periodic Payments:

• 1. Fixed Dollar Amount: You may have your account funds distributed in a specified dollar amount until your account is exhausted.
• 2. Fixed Time Period: You may have your account funds distributed periodically based on a specific number of years.

Lump-Sum Payments:

• 1. Partial Lump-Sum: You may receive a partial lump-sum payment and leave the balance in the account.
• 2. Full Lump-Sum: You may receive a lump-sum payment consisting of the balance in the account(s).

Combination of Elections:

• Participants may take a partial lump-sum payment and start periodic payments or a partial lump-sum payment and roll over a portion or the remaining balance to an eligible retirement plan.

The IRS allows a cash-out provision if all the following conditions are met:

• The account balance is $5,000 or less.
• There have been no contributions into the account for 24 months prior to the cash-out distribution.
• There have been no prior distributions other than hardship distributions.

It depends. RMDs are not required for members with a Roth Account. Beneficiaries of Roth Accounts may be subject to RMDs. Contact RSA-1 for more information.

The 5-taxable-year period of participation begins on the first day of your taxable year for which you f irst made designated Roth contributions to the plan. It ends when five consecutive taxable years have passed. If you make a direct rollover from a Roth Account under another plan, the 5-taxableyear period for the recipient plan begins on the first day of the taxable year that you made designated Roth contributions to the other plan, if earlier.

It depends. The same restrictions on withdrawals that apply to Pre-Tax elective contributions also apply to designated Roth contributions. However, if the withdrawal of Roth contributions is a qualified distribution, then the withdrawal will be tax free.

Required Minimum Distributions (RMDs) are the minimum amounts that must eventually be distributed from the plan to participants and beneficiaries of Pre-Tax Accounts. Participants and beneficiaries who do not take timely RMDs from the plan will be subject to a 25% excise tax on the amount of the Required Minimum Distribution that should have been distributed. Of course, distributions can be made in greater amounts than the minimum required by law. In general, a participant is required to begin distributions no later than April 1 of the calendar year following the later of:

• The calendar year the participant attains age 73 OR the calendar year the participant retires.

A participant’s RMDs are generally distributed during a participant’s lifetime based upon the participant’s life expectancy. RMD rules continue to apply after the participant’s death. 

Federal and state tax information can be found on page 20 of the RSA-1 Member Handbook.

Tax Withholding: 

• Distributions are subject to the IRS withholding rules applicable to qualified plans.
• For lump-sum payments and partial lump-sum payments that are eligible for rollover distribution, federal law requires a 20% withholding.
• For periodic payments of less than 10 years’ duration, the member will have 20% withheld for federal income tax as required by the IRS.
• For periodic payments of greater than 10 years’ duration, the member may select the amount of federal tax they wish to have withheld from their periodic disbursement by using Form W-4P, Withholding Certificate for Periodic Pension or Annuity Payments.
• Generally, for payments to non-resident aliens, the IRS requires 30% withheld for federal tax.

Pre-Tax Account Distribution:

• Deferred income and investment earnings distributed from RSA-1 will be taxed to you or your beneficiary as ordinary income in the year of distribution. RSA-1 payments to you and your beneficiaries are reported on a Form 1099-R in the year of distribution. There is no penalty for early distribution from a Section 457 Deferred Compensation Plan such as RSA-1 regardless of your age at the time of distribution.
• For amounts deferred in 1996 and prior years, the principal and interest are subject to federal income tax upon distribution, while only interest is subject to state of Alabama income tax upon distribution.  
• For amounts deferred in 1997 and years thereafter, the principal and interest are subject to federal and state of Alabama income tax upon distribution.
• Principal distribution from a DROP, PLOP, or ERIP rollover account is not subject to state of Alabama income tax.

Roth Account Distribution:

• If the withdrawal of Roth contributions is a qualified distribution, then the withdrawal will be tax-free.