ira contribution limitation

							Memorandum
TO:             JMU Employees

FROM:           Human Resources

DATE:           July 16, 2008

SUBJECT:     Roth IRA
______________________________________________________________________________

James Madison University offers the ability to participant in a Roth IRA through payroll deduction.

The Taxpayer Relief Act of 1997 created the Roth IRA, a completely new type of IRA. The Roth
IRA allows you to invest in a tax-advantaged retirement account, and you (or your spouse) must work
in order to contribute. The Roth IRA contribution limit is $5,000 in 2008. Contributions are made
with after-tax dollars, but are tax-free at the time of withdrawal. Eligibility to participate in a Roth
IRA depends on several factors such as adjusted gross income, your tax-filing status, and whether you
currently participate in a company-sponsored retirement plan. A financial advisor will be able to
provide you with additional information on a Roth IRA.

To participate, you must contact one of the companies listed below to set up an account and complete
a Roth IRA Deduction form.

Ameriprise Financial Services                    Lincoln National
Andy Huggins (540) 434-4956                      Deborah Scalise(540) 433-9575
Frank Driver (540) 434-8278
Linda Hoover (540) 434-0484
Jim Fraizer (540) 434-6344
Christopher Goehner (540) 432-0978               AIG Retirement
Stephen Krech (540) 434-3622                     Sean Lankard (888) 477-2680
Beth Croushorn (540) 434-4956                    Michael Cooley (540) 459-7384
Michael Bowen (540) 434-0432

Met Life
Ed Morrison (540) 433-9178


We are happy to provide you with this benefit.




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                                                 ROTH IRA
Benefits to the Taxpayer
    Tax free earnings (provided certain conditions are met)
    Tax free distributions; no need to project for future tax bites.
    No required minimum distribution before death
    Contributions can continue as long as the owner has income (no age limitation)
    Easier access to money before retirement
Contributions
    Made with after-tax dollars; therefore, no deduction is available
    Limited to $3,000 per year total contributions in 2004 ($6000 per married couple) made to all
        Traditional Roth IRAs..*($4,000 in 2005-2007, $5,000 in 2008)
    Contribution is reduced if Adjusted Gross Income (AGI) hits $95,000 (single filer) and $150,000
        (joint filer). No contribution is allowed if AGI reaches $110,000 (single) and $160,000 (joint).
    Contributions can be made even after age 70-1/2.

Earnings
     Earnings grow tax free

Distributions
     All qualified distributions are tax-free. Non-qualified distributions may be subject to taxes and
         penalties.
     Distributions are deducted from the contribution amount in the Roth IRA. After the contribution
         amount is used up, distributions are taken from earnings, which would be subject to tax and
         possibly penalties.
     There are no required minimum distributions before death.
     Distribution on death follow Tradition IRA rules, which generally:
                  If the beneficiary is the spouse, the spouse may roll the IRA into his/her own IRA.
                  If not a spouse, beneficiaries must take a lump-sum distribution within five years of life
                  expectancy.

Tax-free Withdrawals                                         Penalty-free Withdrawals
 Always tax-free                                             Always tax-free

Earnings                                                     Earnings
Satisfy the 5-year invested period                           Satisfy one of the conditions listed below:
(5 years from date of initial contribution or,
if a conversion, 5 years from date of latest
conversion) AND satisfy one of the following                 -age 59-1/2
                                                             -death
                                                             -first-home purchase
-age 59-1/2                                                  -college expenses
-death                                                       -to take periodic payments
-disability                                                  -to pay health insurance after lengthy
                                                               employment
                                                             -to pay catastrophic medical expenses
                                                             -to return excess contributions
                                                             (earnings on contributions may be subject
                                                             10% penalty tax)

Converting from a Traditional IRA
Assets in a Traditional IRA may be rolled over to a Roth IRA if the taxpayer’s adjusted gross income for
that year is $100,000 or less (married or single).A married person filing a separate return cannot convert a
traditional IRA to a Roth IRA. The taxable portion of the rollover amount will be treated as income. You
may consult with a financial advisor for additional information or questions.
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                              JAMES MADISON UNIVERSITY
                          ROTH IRA PAYROLL DEDUCTION FORM


Contributions to a Roth IRA will be submitted on a semi-monthly basis and will be processed
beginning the first payroll cycle after receipt of this form.


New Deduction _____ Change              Cancellation



I, ________________________________, hereby authorize James Madison University
to deduct $____________ from my salary each pay period, on a post-tax basis, for deposit into my
Roth IRA account. This amount is to be forwarded on a semi-monthly basis to
______________________________________(company). This authorization will continue until
amended or terminated in writing.

The employee and company are responsible for compliance with all laws and regulations pertaining to
a Roth IRA.

The employee agrees that the employer shall have no liability whatsoever for any loss suffered by the
employee with regard to the selection of a Roth IRA.



_____________________________                   _________________________________
Employee Signature       Date                   Company Agent Signature     Date

_____________________________                   _________________________________
Social Security # or PeopleSoft ID#             HR Representative




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