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- The Pension Service
- 403(b) Plans
403(b) Plans in New Brunswick, NJ
A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan or tax deferred annuity (TDA), is a retirement plan for employees of certain tax-exempt organizations, employees of public schools, and certain ministers. The plan can take the form of an annuity contract, a retirement account set up for church employees, or a custodial account invested in mutual funds.
A 403(b) plan is a retirement plan similar to a 401(k) plan, but one which is offered by public schools and certain 501(c)(3) tax-exempt organizations.
A 403(b) Plan - A retirement plan similar to a 401(k) plan, but one which is offered by public schools and certain 501(c)(3) tax-exempt organizations.
A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan or tax deferred annuity (TDA), is a retirement plan for employees of certain tax-exempt organizations, employees of public schools, and certain ministers. The plan can take the form of an annuity contract, a retirement account set up for church employees, or a custodial account invested in mutual funds.
Individuals cannot set up their own 403(b) accounts; only employers can, and there are several ways in which contributions can be made. Elective deferrals are contributions made under a salary reduction agreement, which allows the employer to withhold money from the employee’s paycheck to be directly deposited into the 403(b) account. Non-elective contributions include employer contributions which may be matching, discretionary, or mandatory contributions. Some plans allow participants to make after-tax contributions, which are not excluded from income and cannot be deducted on the participant’s tax return.
403 Plan Administration in New Brunswick, NJ
For 2019, the limit on elective deferrals has increased from $19,000 to $19,500. The limit on annual additions in 2020 is increased from $56,000 to $57,000. Basically, total employee and employer contributions made to an account can’t exceed the lesser of $57,000 or 100% of includible compensation. Catch-up contributions, if allowed by the plan, can be made by participants who reach age 50 or older by the end of 2020. The maximum amount of catch-up contributions is $6,500 for 2020. An employee who has worked for a qualified organization for 15 or more years may be able to make additional contributions of up to $3,000 for up to five years, provided certain requirements are met.
Benefits: As with other tax-deferred retirement plans, participants do not pay income tax on allowable contributions until they make withdrawals from the plan, usually at retirement age. (This does not apply to contributions made to a Roth contribution program, in which participants pay income tax on contributions to the plan, but distributions are tax-free as long as certain requirements are met.)
Earnings and gains on amounts in the 403(b) account are not taxed until they are withdrawn. (Again, with a Roth account, these earnings are not taxed if withdrawals are qualified distributions.) Participants who contribute to their account may also be eligible for the Retirement Savings Contributions Credit depending on their adjusted gross income level.
Withdrawals: In general, the same tax rules apply to distributions from 403(b) plans that apply to other retirement plans. Distributions cannot be made until the employee reaches age 59 ½ or has a severance from employment, dies, becomes disabled, encounters financial hardship, or has a qualified reservist distribution. Unless certain conditions are met, distributions before age 59 ½ are subject to regular income tax and an additional 10% tax penalty.
Related to: Third Party Administrator in New Brunswick, NJ, TPA in New Brunswick, NJ, Retirement Plan Consultant in New Brunswick, NJ, Retirement Plan Design in New Brunswick, NJ, Pension Consultant in New Brunswick, NJ, Third Party Benefits Administrator (TPA) in New Brunswick, NJ, 403b TPA in New Brunswick, NJ
Further Reading: 403(b) Plans
- 401k and Retirement Plan Limits for the Tax Year 2024
- Choosing A Retirement Plan For Your Small Business
- Compliance Dates & Deadlines
- Creative Plan Design Presentation
- Action Doc: Automatic Enrollment and Automatic Escalation
- SECURE Act: Making it Actionable
- CARES Act Summary-TPS Group
- How the CARES Act Applies to Your Retirement Plan
- Action Doc: Did You Know You Are a Fiduciary
- Action Doc: Advantages of an Unbundled Platform
- Action Doc: Financial Wellness Is Essential to Saving for Retirement
- Action Doc: Maximizing a Business Owners Retirement Benefit
- Action Doc: The Loan They Never Take May Make All the Difference
- Action Doc: To Roth or Not to Roth
- What is an ERISA Fiduciary?
- Action Doc: Understanding Plan Audits
- New Pension Legislation Passes
- Action Doc: Your World Evolves and Your Retirement Plan Should, Too
403(b) Plans Videos
SECURE Act - Setting Every Community Up for Retirement Enhancement.
Resources
401(k) and Retirement Plan Limits for the Tax Year 2024
401(k) and Retirement Plan Limits for the Tax Years 2018 through 2024.
Reviews
We look forward to working with TPS Group next year
As another year ends, I want to express my sincere gratitude and appreciation to you and TPS Group for assigning us Krista Blier. Krista provides exceptional customer service and has been a major asset to me and Lynch, Traub, Keefe & Errante, P.C. She is extremely knowledgeable and always accessible. Always on top of the RMD’s, giving me an explanation on form 5500-SF to present to Mr. Keefe & keeping us updated with any account changes as well as specifics. It is a relief knowing I have full faith in Krista and can turn a blind eye to our account. I cannot tell you how many vendors/brokers I have to stay on top of and babysit to make sure our deadlines are met and to perform their job duties. Krista is a pleasure to work with and we look forward to working with her and TPS Group next year.
- Michael Panela
Highly impressed with their level of expertise and outstanding customer service.
I highly recommend TPS Group and their quality third-party administration for our 403(b) plan. During our long relationship with TPS Group, we have never failed to be impressed with their level of expertise and outstanding customer service. They keep their promises and it’s easy to work with them. Having our own rep Lauren McNabb is a plus!
- Don Senecal
"Extremely Helpful to Our Business"
Malinda deserves special recognition. She is prompt, courteous, and professional. We find her to be extremely helpful to our business.
- Angela Simino
"Wonderful To Work With"
My go to professional is Des. A wonderful person to work with. We can count on him to handle all of our needs.
- Andrea Blakeslee
"Answers All Of My Questions In A Clear Manner"
Our case administrator, Susan, has been absolutely wonderful and is a joy to work with. She is very knowledgeable, patient, answers all of my questions in a clear manner, and is professional.
- Kathy Townsend
Extremely Valuable to Myself and Our Company
Kathleen has helped me gather info and understand text so many times and is extremely valuable to myself and our company.
- Elizabeth Robison
They are a pleasure to work with and we highly recommend their services.
For many years we’ve relied on TPS Group’s extensive knowledge and industry expertise to keep us in compliance with state and federal regulations as well as changes in the law. Their attention to detail is just what we need to keep our business operations running smoothly. They are a pleasure to work with and we highly recommend their services.
- Dan Neal
Dependable, experienced, and professional
Dependable, experienced, and professional, our TPS Group recruiter was an invaluable resource, helping us locate and vet quality talent.
- Tyler R. Vunk
