September 11, 1997

Human Resources explains benefits

Ways to reduce your taxable income

The retirement plan is mandatory (after one year of service) for employees who work 1,000 hours or more per year. The benefits area of Human Resources will contact employees when they become eligible to enroll in the plan. The plan is one of the most generous in that Loyola contributes 8 percent of the employee's salary to accompany the 3.5 percent which is deducted each payroll before taxes from the employee's earnings.

The tax deferred annuity is another way to save money on taxes. This is a supplemental retirement account-in addition to the mandatory retirement plan. Employees may tax defer up to 20 percent of their income, to a maximum of $9,500 per year. There are several very important details which may affect this amount, so it is important that an individual check with the benefits area in Human Resources prior to participation in this benefit. A representative can run a software program, taking all variables into consideration, and come up with an accurate amount that each individual may contribute. This is one of those desirable benefits in which even part-time employees may participate.

Flexible spending accounts may be used to pre-fund (i.e. set aside on a pre-tax basis) expenses which employees will encounter in the future. These expenses are out-of-pocket medical or dental expenses or out-of-pocket dependent care (usually child care) expenses. The amount is taken out of the employee's paycheck, before taxes, therefore reducing the taxable income. Employees pay medical or dependent care expenses and then submit proof of eligible expenses and are reimbursed from their own money which has been deducted from their paycheck. The benefit is usually of more value to employees than claiming these related dependent care or medical expenses at the end of the year when taxes are filed.

The above explanations are only an overview. Employees should contact Jim Phillips at ext. 2030 or Leona Stampley at ext. 2022 for details.

- Charlotte Harris, Director of Human Resources