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403(b) & 457 Plans

403(b) plans

Also known as a tax-sheltered annuity (TSA) plan, may be sponsored by a public school, college or university or a charitable entity tax exempt under IRC section 501(c)(3). These plans function similarly to 401(k) plans with tax deferred treatment of deferrals and earnings. Recently, the regulations governing administering and reporting 403(b) plans have changed. If you are an employer considering sponsoring or currently maintaining a 403(b) plan, you should contact your benefits specialist to determine the impact of these new regulations on your plan.

457 plans

May be eligible or ineligible with salary deferrals and or employer contributions. These plans are available only to governmental employees, public utility companies, elementary and secondary schools, public universities and colleges, city, county, and state hospitals and certain other tax exempt employers. Otherwise known as top hat plans, 457 plans may provide for eligibility of only a select group of management or highly compensated employees. The limits for an eligible 457 plan are the same as 401(k) plans except any employer contributions offset employee deferrals.
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