What every participant should know about an SRA.
A Salary Reduction Agreement is a key component of 403(b) retirement plans, allowing eligible employees to contribute a portion of their salary toward their retirement savings. Here is what you need to know about how SRAs work.
Section 01
What is an SRA?
An SRA is a legally binding agreement between an employee and their employer that authorizes the employer to withhold a specified amount from the employee’s paycheck and contribute it to their 403(b) retirement account. This reduction in salary occurs before taxes are calculated, potentially lowering the employee’s taxable income.
With an SRA, an employee can start contributions, enrolling them into a 403(b). Participants can also change their contribution amount or stop contributions altogether.
Participants may also make a one-time contribution by noting the one-time contribution amount and date on the SRA tool.
Section 02
Key Features of SRAs
Three core characteristics make the SRA a flexible and reliable instrument for retirement planning.
Flexibility
Update any time
Employees can establish, change, or cancel their salary reductions by submitting a new SRA at any time.
Effective Date
Starts the next pay period
The agreement specifies when the salary reductions will begin — typically starting with the next pay period when submitted with sufficient processing time, or as soon as administratively feasible.
Investment Options
Select your provider
The SRA allows employees to select from available investment providers for their contribution from a list of plan-approved options.
Section 03
When will my change in contributions go into effect?
When a participant submits an SRA, a confirmation of the request is sent to their email address. Upon receipt of that confirmation, PlanScope360 notifies the employer.
Please allow two weeks before the next payroll cycle for employer processing.
- You submit your Salary Reduction Agreement through this tool.
- A confirmation email is sent to your work email address.
- PlanScope360 notifies your employer for processing.
- Changes take effect on the next eligible payroll cycle.
Section 04
Need help?
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