A supplemental savings plan is a voluntary saving scheme under voluntary portion of section 403(b) wherein the employee is empowered to defer his compensation and invest it in mutual funds. The returns are credited with earnings from these respective funds and the amount is disbursed to the individual in pre-decided installments over a time span of five to ten years.
In event of individual getting terminated before retirement the fund is disbursed to the concerned individual in lump sum format. In case of sudden demise of the individual the beneficiary nominated by the individual is eligible to receive the corpus. The amounts of funds one can defer depend on the excess over the threshold and have a maximum limit in accordance with the internal revenue code. An individual has to complete a salary reduction form and submit it with his parent organization to be able to invest in this scheme and can also avail loans against this fund.
[Also Read: Supplemental Savings Incentive Plan]
Sample for Supplemental Savings Plan
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