Begin saving more money for later while saving taxes now with RSA-1. Any public official or employee of the state of Alabama or any political subdivision of the state is eligible to enroll, regardless of age or participation in the RSA. The RSA-1 Program is voluntary, and can help you plan for a secure financial future.
Read your RSA-1 Member Handbook for more information!
Enrolling is an Easy Three-Step Process!
- Complete the forms. To set up your account, you'll complete the RSA-1 Enrollment form, Beneficiary Designation form, and Investment Option Election form.
- Determine how much of your earnings you want to defer each paycheck. There is no minimum to a Deferral Limit established by the IRS each year.
- Complete the Authorization to Defer Compensation form stating the amount you wish to defer, and submit it to your payroll office – not to RSA-1. Contributions can only be deferred through payroll deductions.
What is the RSA-1 Deferred Compensation Plan?
RSA-1 is an Internal Revenue Code Section 457 deferred compensation plan for public employees. This voluntary plan allows you to save and invest extra money for retirement, tax deferred. Not only will you defer taxes immediately, your contributions and any earnings will grow on a tax-deferred basis as well.
What are my investment options?
You have three investment options:
- bonds - various debt instruments greater than one year such as corporate bonds, U.S. agency obligations, government national mortgage association securities, and commercial paper
- stocks - S&P 500 Index Fund, which consists of 500 large capitalization stocks
- short-term investments (STIF) - 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
The RSA-1 staff can further explain these options to you, but cannot advise you regarding which particular option to elect. When choosing between the bond, stock, and STIF options, you should strive for an optimal blend of risk and reward — based on your age, years until retirement, and tolerance for risk.
How often can I change how my RSA-1 is invested? Can I pick the stocks or bonds for my account?
You can change your Investment Option Election for your account balance or your future deferrals EVERY 90 days. The RSA-1 investments are not self-directed (you do not pick and choose individual investments). They are invested as a pool in a bond fund, stock fund, or a short-term investment fund by the RSA Investment Staff who manage the ERS and TRS investments.
Can I put in extra money in my RSA- 1 account from sources other than my job?
No, you cannot “add other funds” to your RSA-1 Account. All contributions to this account are actually called “deferrals” and must be made through payroll deductions.
Can I add money to my RSA-1 account once I am officially retired?
No. You must be publicly employed to be eligible to contribute to RSA-1. However, DROP funds can be rolled over into RSA-1, as well as incoming transfers from other 457(b) plans.
Can I borrow funds or withdraw some money from my RSA-1 account?
There is no provision for a “loan” from your RSA-1 account. You may not withdraw from your account unless you are no longer employed with a state agency or school, are age 70½ or older, have an unforeseeable emergency, or qualify for a small balance withdrawal.
Who is my beneficiary?
Beneficiary information can be obtained through the Member Online Services account, on the quarterly statement, or can be mailed to you upon request. Beneficiary information cannot be given over the phone.
How often can I change my beneficiary on my RSA-1 account?
Your beneficiary can be changed at any time by filing a signed, dated and notarized Beneficiary Designation form with RSA-1. It is very important that beneficiary designations are updated when beneficiary names or beneficiary addresses change.
Does RSA-1 charge any fees to members?
No. All the money you defer and all investment earnings are placed into your account and managed by RSA Investment Staff.
How can I find out what my current RSA- 1 balance is?
You can find the balance by viewing your Member Online Services account or by contacting RSA-1 and requesting a balance letter be mailed to you.
Once I have chosen an initial investment option for my account, how often can I make a change to the investment?
Each election must be in effect for 90 days, and will remain in effect until a subsequent eligible election is made.
Does RSA-1 offer an investment option that is totally risk-free?
No, however investments in our Short-Term Investment Fund (STIF) will typically encounter less market risk than stocks and bonds, and usually provide a lower rate of return than investments in those categories.
What are the requirements to withdraw my funds?
RSA-1 Participants must be separated from service to receive a distribution. No age requirement. No penalties for withdrawing before age 59 ½.
What are my withdrawal options?
You have the following withdrawal options:
- Partial lump sum or full lump sum
- Periodic payment - monthly or annually
- Outgoing rollover to an eligible plan
Do I have to have all of my funds withdrawn by the time I attain age 70½?
No, however you must begin your Required Minimum Distributions (RMD) no later than April 1 of the calendar year following the later of either the calendar year you attain age 70½ or the calendar year you retire.
What are the federal tax withholding options for distributions?
- For lump-sum payments and partial lump-sum payments that are eligible for rollover distribution, federal law requires a minimum 20% withholding.
- For periodic payments of less than 10 years’ duration, the participant will have a minimum of 20% withheld for federal income tax as required by the IRS.
- For periodic payments of greater than 10 years’ duration, the participant may select the amount of federal tax they wish to have withheld from their monthly or annual disbursement. The distribution will be subject to a 10% federal tax withholding if no election is made.
Will I be notified when the money is sent to my bank
No. However, RSA-1 deposits monthly and annual distributions to your bank account on the last business day of the month.