If you are a faculty member scheduled to receive a bonus on your August 30 paycheck, bonuses are included by default in your take home pay. Because your take home pay will be larger than usual due to the bonus, you may request to defer a lump sum from your paycheck to a retirement savings plan on the date your bonus is paid.   

As a reminder, any lump sum amount you defer to a retirement savings plan counts toward the 2019 annual savings limit for that plan, along with any regular paycheck contributions you have made during 2019. For information on this topic, search “retirement tax savings limits” at hr.vcu.edu.

Option 1: Take no action and your regular pay plus your bonus are included in your August 30 paycheck

On your pay stub, your bonus amount will show on a separate line from your regular earnings. Bonus payments are taxed at a supplemental tax rate, as required by law.

Option 2: Defer a lump sum from your August 30 paycheck to the VCU 403(b) Tax Deferred Annuity Plan (TDA) with Fidelity Investments or TIAA

To defer a lump sum from your August 30 paycheck, complete a Salary reduction agreement form, specifying the lump sum amount you want to defer on August 30 and the regular deferral amount you want to return to beginning with your September 1 paycheck. VCU Payroll must receive your Lump Sum Salary Reduction Agreement no later than Tuesday, August 20. The regular deferral amount you indicate will continue on future paychecks unless you submit a new Salary Reduction Agreement.

If you already have a VCU TDA account, your deferrals will go to that account. If you do not participate in the TDA yet, you’ll also need to open a TDA account online with either TIAA (www.tiaa.org/vcu) or Fidelity Investments (www.netbenefits.com/vcu), no later than August 30.

Option 3: Delay your bonus until September 16 so that you can defer a lump sum from your September 16 paycheck to the Commonwealth of Virginia 457 Deferred Compensation Plan (DCP)

The Commonwealth of Virginia plan does not permit deferral elections and actual deferrals in the same month. For this reason, if you wish to defer a lump sum to the Commonwealth of Virginia plan, your bonus payment date will be delayed until September 16th. You cannot elect to delay the bonus for any other reason. To defer a lump sum from your September 16 paycheck, complete the DCP one-time deferral form. VCU Payroll must receive your DCP one-time deferral form no later than Tuesday, August 20 to avoid having your bonus included in the August 30 paycheck. If you do not already have a DCP account, you will need to open an account online at varetirement.org/dcp, or by calling 1-877-327-5261 on or before August 30.

Please note these important reminders:

• By default, your bonus will be included in your August 30 paycheck with no action required from you. Once your bonus is included in your paycheck, it cannot be returned and deferred to a retirement plan. There are no extensions available for deferral requests. VCU Payroll must receive all deferral requests no later than Tuesday, August 20.
• When you make paycheck deferrals to a retirement savings plan, your regular pay is deferred first. You cannot choose to take home all of your regular pay and defer only your bonus. If your lump sum deferral amount is less than your regular pay, the entire amount will be deferred from your regular pay. If your lump sum deferral amount is more than your regular pay, then your regular pay plus part of, or all of, your bonus will be deferred depending upon the deferral amount you request. Because regular pay is deferred first, the only way to defer your entire bonus is to defer your entire paycheck on the date the bonus is included.
• Any amount of bonus pay included in your paycheck will be taxed at the supplemental rate required by law.

Return deferral forms to VCU Payroll

In person: HR Welcome Center, Lindsey House, 600 W. Franklin St. (Note: Belvidere St. Entrance)

Email: payroll@vcu.edu

Fax: (804) 828-3200

Questions?

In person: HR Welcome Center, Lindsey House, 600 W. Franklin St. (Note: Belvidere St. Entrance)

Email: askhr@vcu.edu

Phone: (804) 828-0177

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