403(b) Plans

Everyone knows what a 401(k) plan is, but perhaps you may not be totally familiar
with 403(b) plans yet. Here is what you should be telling some of your
clients about 403(b) plans:
  • These plans are for non-profit and not-for-profit organizations (only Tax Code Section 501(c)(3) organizations).
  • These organizations have a choice between 401(k) and 403(b).
  • In addition, a 403(b) plan is a tax-advantaged retirement savings plan that is available for public education organizations, cooperative hospital service organizations and self-employed ministers in the U.S.
  • 403(b) plans have a tax treatment similar to a 401(k) plan.
  • 403(b) plan participants may defer salary into the plan before income tax is taken out (like in a 401(k) plan), but there is no discrimination test to restrict benefits to the highest paid executives.
  • As under a 401(k) plan, some participants will not be taxed on their withdrawals if they meet certain requirements. Available starting in 2006, these are designated Roth contributions, and one requirement for tax-free withdrawals is the employee generally has to have had a Roth account in the 403(b) plan for at least 5 taxable years.

Client Center

Defined Contribution Plans

Defined Benefit Plans

Consulting and Design

Choosing the Right Option is Key!

RPAS handles all elements of 403(b) documentation, regulation compliance, government reporting and plan administration, and we are able to provide low-cost, fully compliant administration that meets all plan rules. Request a plan design illustration and give your eligible clients the options they deserve.

Excellence in Service

If your clients are wondering what their options are, depending on what type of business they own or manage, you can let them know about the 403(b) plan option. Being an “independent” third party administration company, RPAS is experienced in implementing 403(b) plans for the clients of investment and other financial advisors. Request a consultation or plan illustration by calling us now at 804-288-8782, or toll free at 800-235-9649.

You can reassure your clients that the 403(b) plan documentation and all necessary administration will be handled by RPAS, and they will see many of the same benefits as they would if they chose a 401(k) plan – without some of the technical difficulties that are sometimes associated with 401(k) plans. Some of these technical difficulties can be discrimination testing, plus certain restrictions and administrative issues when it comes to employer contributions. You may avoid the possibility of having a plan that your client likes and wants to implement right away, only to find out that there may be an alternative to avoid some of the problems administering the plan. 403(b) plans see fewer of these kinds of difficulties for many eligible employers.