Plan Comparison: TSA vs. DCP
Employee Withdrawals
General Contribution Limits*
Catch Up Limits (For traditional and Roth sources)**
Catch Up Roth Requirements
Distributions Upon Separation of Employment***
$24,500 IRS maximum (2026) for both traditional and Roth sources. (Each dollar of a Roth contribution reduces the amount that can be contributed pretax, and vice versa.)
Turning 50 or older $8,000 Turning 60-63 $11,250
$24,500 IRS maximum (2026) for both traditional and Roth sources. (Each dollar of a Roth contribution reduces the amount that can be contributed pretax, and vice versa.)
Starting in 2026, participants 50 or older who earned more than $150,000 in FICA (W-2 Box-3) wages from their current UT Institution for 2025 must make catch-up contributions as Roth (after-tax) contributions. Participants who earned less than that amount may still make either pre-tax or Roth catch-up contributions.
Distributions made prior to age 59 ½ will be subject to ordinary income tax and a possible 10% penalty
“Nonqualified” distributions made prior to age 59 ½ will be subject to ordinary income tax and possibly a 10% penalty
Distributions will be subject to ordinary income tax
*Contribution limits shown are IRS maximums for 2026. The 2025 limits were $23,500 with $7,500 age 50 catch up.
“Nonqualified” distributions will be subject to ordinary income tax for any earnings on the account.
**Per Section 109 of the Secure 2.0 Act, any employees who turn 60-63 during the year are eligible to contribute the greater of $10,000 or 150% of the age 50 catch-up. During the year employees turn 64, the catch up reverts to the standard age 50 amount.
*** A “qualified” distribution occurs when the Roth account (TSA or DCP) has been in place for five taxable years (from the year of first contribution) and one of the following events has occurred: (1) attainment of age 59 ½; (2) disability; or (3) death. Contribution limits may vary based on income, years of service, previous deferrals, and other factors. Contact your Benefits Office for a calculation of your personal contribution limit for each voluntary program.
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