Defined Contribution Plans

403(b) Plans


Section 403(b) plans are also referred to as a tax sheltered annuity or TSA. They are a special type of retirement plans for certain tax-exempt organizations and public education organizations.


Section 403(b) was created by Congress in 1958 to limit the contributions being made toward tax-deferred vehicles. In 1961 the plans were extended to public school employees. In 1964 many of the current regulations were written and implemented.


Section 403(b) plans may receive various types of
contributions such as:

  1. Employee Deferrals
  2. Employer Matching Contributions
  3. Employer nonelective contributions
  4. Employee after-tax contributions.
  5. Pre-tax Roth contributions were made available in 2006.

Eligible Employers

  1. Sate or subdivisions of a state
  2. State agencies
  3. District of Columbia
  4. Indian Tribal Governments
  5. Not for Profits under Section 501(c)(3)
  6. School districts

Investment Alternatives

  1. Annuities Section 403(b)(1)
  2. Custodial Accounts 403(b)(7)
  3. Retirement Income Accounts 403(b)(9) – Church plans only

Contribution Limitations

  1. Deferral and employer contributions must not exceed the statutory limits, please see the brochure on 403(b) plans for the current limitations.

  2. Special catch up contribution is available for employees who have been with a single employer for 15 years or more.

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