.png)
TEACHERS
Ideal for educators (teachers, administrators, superintendents, etc.), the 403(b) plan is an effective tool to supplement their state’s Teacher Retirement System pension, which by itself will not be adequate for most of them.
TEACHER RETIREMENT OPTIONS
403(b) Basics • Established in 1958. • Named after a section of the IRS tax code. • Full name: 403(b) Tax-Sheltered Annuity (TSA). • Purpose: Created specifically for public schools and certain 501(c)(3) tax-exempt organizations to offer their employees.
​
​
How 403(b) Plans Work • Funded with pre-tax contributions. • Allows catch-up contributions from participants over 50. • Partial access through loans, withdrawals and other options or annuity features. • Permits penalty-free full withdrawals at age 59½, or for other qualifying events.
​
​
403(b) Plan Benefits • Tax-deferred growth potential. • Complements other retirement plans. • Flexible account options to diversify assets. • Portable for easy, tax-free rollovers to other plans and IRAs. • Available as traditional, Roth, Special Pay and 3121 plans.
​
​
​
​
​
IRS 403(b) Universal Availability Compliance Requirements
The IRS requires that all employees who have the right to make elective deferrals to a 403(b) plan must be offered the ability to do so. The IRS also requires employers to annually notify all eligible employees of their right to participate in the plan. These requirements are known as the “universal availability” rule.
The IRS may audit a public school district’s 403(b) plan at any time in an ongoing attempt to assure that the plan is in compliance with the universal availability rule. The rule states that if any employee is permitted to make elective salary deferrals to a 403(b) plan, then all employees, with limited exclusions, must have the same opportunity to participate in that plan.
Employee eligibility notification can be done in written or electronic form, but orally is not good enough. Is your 403(b) plan compliant? No matter how you administer your plan – whether inhouse or with assistance from your TPA – it’s important to make sure you are in compliance with the universal availability requirements of IRC 403(b)(12) (A)(ii) and the final 403(b) regulations.
Compliance problems are best avoided altogether and, if encountered, easier and cheaper to fix when they’re small and caught early.
Schedule a Teacher Workshop TODAY!
To Learn More About Your Retirement Options
THE JT GROUP AND ASSOCIATES
.png)
