Monday, December 5, 2016

4 Questions Plan Sponsors Should Ask to Understand the Similarities and Differences Between 401(k) and 403(b) Plans

1. Which employers can offer a 403(b) plan?

  • Public education organizations such as public elementary and high schools, state colleges and universities, and boards of education.
  • 501(c)(3) nonprofit organizations such as private schools, research facilities, private hospitals, charities, social welfare agencies, healthcare organizations, and religious institutions.
  • Grandfathered Indian tribal governments.
  • Certain religious ministers of a church or related religious organizations.

2. Which employers can offer a 401(k) plan?

Almost any type of company may offer a 401(k) plan. Most private, for-profit companies are eligible. Many tax-exempt, non-profit organizations have a choice between sponsoring a 401(k), a 403(b), or both.

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