best dating site in usa yahoo - Updating 403 b plan

The major reason why many tax-exempt entities continue to use 403(b), as opposed to 401(k), plans (another change from a few years ago is that 501(c)(3) organization are permitted to utilize both plan types) is that it is not necessary to test 403(b) salary deferral employee contributions.As a result, highly compensated employees (defined in 2011 as those who earned in excess of 0,000 in 2010) have no additional limitations imposed on their ability to save (other than the overall IRS 402(g) limitations).Defects with respect to the calculation of such elections are a frequent IRS audit issue, which is why such an election has disappeared from many 403(b) plans.401(k) plans do not permit post-employment contributions, but 403(b) plan permit post employment EMPLOYER contributions (NOT elective deferrals) to be made for up to five tax years following termination of employment. There are a myriad of providers who service 401(k) plans.

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This is because the main advantage of ERISA plans for participants has been in the event of bankruptcy of the account holder, but this advantage ceased to exist after the October 2007 Bankruptcy Abuse Prevention and Consumer Protection Act extended bankruptcy protection to 403(b) plans.

While they are different in some fundamental ways, qualified and unqualified plans appear almost the same to the participant and the options available are very similar.

Another important distinction in 403(b) plans is that they are limited with respect to the types of investments that can be offered.

Many types of investments that are permitted in 401(k) plan, such as individual securities, are prohibited in 403(b) plans, which are limited to 403(b)(1) fixed/variable annuities and 403(b)(7) custodial accounts (mutual funds).

This relative lack of competition can affect pricing and marketplace advancements but for large plans 401(k) and 403(b) product/service offerings will often be quite comparable.

There are several other 403(b) plan distinctions (state taxation in NJ, employer eligibility, and top heavy testing to name a few), but the above list captures the distinctions of most significant impact to plan sponsors.Unique to the 403(b) plan is the Universal Availability requirement, which means that all employees (with limited exceptions) MUST be permitted to make elective deferrals from date of hire.In 401(k) plans, eligibility to make elective deferrals can be restricted, subject to nondiscrimination testing requirements.Though 403(b) plans have become more and more like 401(k) plans in recent years, the aforementioned distinctions illustrate the large gap between 403(b) and 401(k) plans that has yet to be bridged.How much time it will take to bridge this gap is for the future to determine, but it would appear that 403(b) plans are far from taking their last breath.Typically, at nonprofits, unmatched deferrals for non-highly compensated employees average about 2%.

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