The AACS 403(b) Retirement Plan is available to employees of AACS-related ministries. An overview of the AACS Retirement Plan benefits is as follows:

1.      A convenient way to save regularly for retirement by using pre-tax dollars, which gives participants (employees) the added benefit of tax-deferred growth and income.

2.      Permits the participants to authorize the employer (AACS Church and/or School) to make pre-tax contributions to his personal 403(b) account. The employee decides the amount to contribute, not to exceed the amount allowed by law.

3.      Selects the AIM and/or American Management Groups to professionally manage the participant’s retirement funds. 

4.      Waiver of AIM sales charges.

5.      Advice from a qualified broker will be available to help each participant to create a portfolio of funds that reflects the individual participant’s investment style. Ask for information by contacting the AACS National office at 423-629-4280.  

Background Information
AIM Investments was originally contracted to manage the AACS 403(b) Retirement Plan. As a world-class investment mutual fund complex, AIM and its affiliates manage approximately $463 billion in assets. American Funds, with $864 billion in assets has been added to the AACS 403(b) Retirement Plan managers. Plan participants (employees of AACS schools and churches) select the AIM and/or American Funds families they want to invest their pre-tax payroll deductions.

Plan participants enjoy the same professional management that is normally reserved for wealthy investors. In other words, the management of your AIM funds is available to you with no sales charges. All AIM 403(b) Retirement Plan contributions are no-load, NAV purchases. This means a Christian school teacher investing $15 per month receives the same benefits as a wealthy investor with a $1,000,000. Participants also receive independent professional brokerage firm advice at no charge. In addition, there are no surrender charges.  Presently, American Funds contributions are load NAV purchases, thus a sales charge is involved.

The AACS 403(b) Retirement Plan is also unique in that it allows higher maximum annual contributions. In addition to the normal annual maximum contributions a participant can invest, an additional $10,000 annually ($40,000 lifetime) can be deferred into the AACS Plan. These contributions must be employer contributions (church or school). The AACS Plan provides tax-free housing distributions at retirement age (currently 59 ½) for ordained, certified, or licensed ministers.

To begin a payroll deduction 403(b) plan, the participant simply asks the AACS church or school ministry to begin payroll deductions through the salary deferral agreement. The 403(b) payroll deductions are forwarded to the AACS 403(b) Retirement Plan at PO Box 6792, Lee’s Summit, Missouri 64064-6792.  Many AACS ministries contribute to their employees’ retirement account through a “matching” fund arrangement. For example, a church or school matches the employees’ contributions up to a certain amount or percentage. All monies are deposited in a master account. A two (2) percent administrative fee is deducted from new contributions submitted to AIM.
Contributions are forwarded in a timely manner (generally about 10 business days) to AIM or American Funds.

The individual plan participants are the auditors for the plan and their contributions. In other words, each participant is responsible to monitor his or her account.  Individual accounts can be traced and verified through three avenues: (1) quarterly statements, (2) annual statements, or (3) through up-to-the-minute, online access.
There are circumstances that can slow, stall, or stop the above receiving, posting, and accounting procedure. However, such instances are usually easily rectified by the 403(b) staff with the help of the affected ministry. These include the following:

1.         Contributions received without appropriate accompanying documentation, such as missing applications from new participants or missing “transmittal forms” from the school or church, which shows the proper amounts and contributing participants.

2.         Missing or inaccurate social security numbers.

3.         Checks with an amount that differs from the transmittal form.

4.         Checks that are less than the amount needed for the deposit with instructions from the school asking the Plan Administrator to take funds out of a terminated employee’s account that the school paid in error from prior pay periods.  

5.         Inconsistent instructions from the school, including such requests, as asking the Plan Administrator to date contributions to a prior school year that is beyond the normal accepted cut-off date. This occurs frequently when a ministry forgets to send in the “employer portion” of the contribution. These issues can usually be accommodated within reason; however, they do cause posting delays.

Frequently Asked Questions and Answers

The following frequently-asked “questions and answers” provide additional details on the AACS 403(b) Retirement Plan. 

1. Why do ministries submit 403(b) contributions to the AACS 403(b) Retirement Plan rather than directly to AIM?

Making contributions directly to the AACS 403(b) Retirement Plan enables AACS ministry employees to receive the NAV (no-load) purchase benefit; this happens because AIM considers AACS as one large employer. Generally, money managers like AIM will not treat a large group like AACS [comprised of many sub-groups (member schools)] as one employer. This benefit allows AACS teachers and staff to contribute as little as $15 per pay period and receive the same discount as a $1,000,000 purchaser. In order to offset expenses for this benefit, AIM requires AACS to pay from a central source, which is what a large employer would normally do. This operational procedure was recommended by AIM and reviewed by our brokerage firm, Global Wealth Management & Business Banking, UBS. Currently, the no-load sales charge benefit does not apply to American Funds.  

2.  Can the ministry submit their contributions electronically?

Yes. Contributions can be made electronically to the 403(b) Retirement Plan Office in Kansas City, Missouri. The ministry can e-mail the appropriate information showing “who is contributing what” to the Plan Office and authorize ACH transmissions to the AACS 403(b) Retirement Plan bank account. Several schools and churches do this. However, the employer cannot submit transmissions directly to AIM and get the NAV (no load) purchase price. Obviously, AIM is capable of handling direct deposits from the participants, but doing so violates AACS’s agreement with AIM. If contributions are made directly to AIM, normal sales charges would apply to the ministry and their employees.

3. How are funds handled after they are sent from an AACS ministry?

AACS ministries generally submit their contributions and supporting documentation (transmittal forms, employee/employer designations, etc.) to the AACS 403(b) Retirement Plan Office at P.O. Box 6792, Lee’s Summit, Missouri 64064-6792. The Plan Office provides self-addressed envelopes for ministry use; contributions are collected weekly, bimonthly, or monthly and deposited by a 403(b) dedicated employee into the AACS 403(b) Retirement Plan checking account. This account is reserved for 403(b) contributions only. (If there are any new employee designations, new account applications must be faxed (816-229-0197) or mailed to the AACS 403 (b) Retirement Plan Office at P.O. Box 6792, Lee’s Summit, Missouri 64064-6792 for account setup before the new participant funds are sent.) Contributions are then either wired to AIM or a check is submitted via overnight delivery.   

4. When can I expect to see my contributions posted to my account?

If the ministry submits the transmittal data electronically via e-mail to the Plan Office and submits the respective funds via ACH transfers, the participants account will generally be credited in five (5) business days. (ACH is an acronym for Automated Clearing House, an electronic network for making financial transactions.) If the ministry sends the data and check via U.S. mail or overnight delivery service, the account would generally be posted in ten (10) business days after the day it is received. 

5. What are the ministry’s responsibilities regarding submission of funds?

Employee contributions (salary deferrals) should be submitted to the AACS 403(b) Retirement Plan Office no later than 15 days after the pay period the deferral funds were withheld. At the latest, these funds must be sent within fifteen (15) days after the end of the month in which the funds were withheld. Employer matching contributions or employer elective deferrals can be sent in anytime, but they must be specified in the Summary Plan Description (SPD) or Plan Document.

6. What happens if AACS receives funds for employees that have not submitted proper or no paperwork?

New participant salary deferrals are sent to the 403 (b) Retirement Plan Office and processed accordingly along with the deferral funds submitted by the ministry’s existing participants. However, new participant’s funds cannot be submitted to AIM (no-load) or American Funds (load) until an account is set up for the participant. Generally, the AACS 403(b) Retirement Plan Office calls the employer and requests the new participant’s application. Normally, a phone call is sufficient.

In some instances, however, the new participant’s application is not received punctually from the ministry. When this happens, the AACS 403(b) Retirement Plan Office calls the ministry (church or school) or the participant at least quarterly. Meanwhile, the funds are held until the participant’s application is received. If the ministry, after repeated inquires, fails to submit the appropriate paperwork, the school or church is called and asked if they want the funds returned. In most cases, the AACS 403(b) Retirement Plan Office is asked to hold the funds to avoid complication and possible tax consequences if they are returned. If these issues are not resolved within one calendar year, the funds are returned to the ministry.

7. Is AIM the only money manager/mutual fund that we can use?

The AACS 403(b) Retirement Plan is constantly looking for ways to improve the investment choices available to the plan participants. The American Funds have been recently added as an “approved” investment choice; however, the American Funds is a “load” fund as compared to AIM that is a “no-load” fund. Participants can designate whole percentage splits between the two (2) AACS “approved” managers, that is, 50 percent contribution to AIM and 50 percent contribution to American Funds.

8. Is a multi-manager platform available? Can participants invest with more than one manager?

Several multi-managers or fund platforms have been evaluated. When compared with the cost structure of the AACS 403(b) Retirement Plan with AIM, other multi-manage platforms cannot compete. Most multi-manager platforms would cost the AACS Plan, the ministry, or the participant about five (5) times the present two percent (2%) administrative charge.  American Funds was recently added to the AACS 403(b) Retirement Plan fund platforms.

9. I am in a very low tax bracket and the pretax nature of a 403(b) really does not help me. Can I invest my contributions into a 403(b) Roth account?

Yes. AIM made this arrangement available in 2007. If you wish your contribution to be designated as a Roth contribution, simply let the AACS 403(b) Retirement Plan Office know. You can commingle your normal 403(b) with the Roth contributions in the same account, eliminating the need for more than one account. AIM will keep the proper recordkeeping for your contributions, as will American Funds.    

Remember, failing to plan is planning to fail!

For more information, contact the AACS 403(b) Retirement Plan Office at 423-629-4280