403(b) Plans

Certain defined contribution plans are only available to certain types of employers such as 501(c)(3) tax-exempt employers, school systems, hospitals, and governmental employers. The most common type of these plans is the 403(b) plan which is available to 501(c)(3) tax-exempt organizations and schools.  A 403(b) plan is very similar to a 410(k) plan.   Employees are allowed to defer income and the plan may include other contribution types such as an employer match. The advantage of these plans is that the nondiscrimination requirements are not as strict as they are for a 401(k) plan. For additional information regarding 403(b) plans, check out the IRS’ information at 403(b) Plans.

Another type of plan available to these employers is the 457(b) plan that allows for employer and employee contributions and, in certain circumstances, when paired with a 401(k) or 403(b) may allow an employee to increase the amount of their income deferral.