403(b) Plan Summary

The final 403(b) regulations outline certain requirements that must be satisfied for a 403(b) program to qualify for the exclusion from income available under §403(b) of the Code. One of these requirements is that the employer sponsoring the 403(b) plan must establish and maintain a written plan that includes all material terms and conditions relating to eligibility, contributions into the plan, benefits of the plan, distributions from the plan and products available under the plan. The plan document will have all the necessary mandatory features but it will also have optional features.

Key elements in your employers plan document.

All employees are eligible to participate in the Plan except student workers.
The Plan will allow the “aged 50+ catch up”.
Loans are permitted under the Plan.
Exchanges are permitted between vendors authorized under the Plan.
Rollovers from the Plan are permitted. Rollovers into the Plan are permitted as long as the rollover is deposited with one of the authorized vendors named under the Plan.
Distributions from the Plan are allowed upon death, disability, separation from service and age 59 ½.

Elements that will not be allowed in your employer plan document.

The plan will not allow the “15 year of service catch up”.
Roth 403(b) contributions will not be allowed.
Hardship distributions are not allowed under the Plan.
Transfers into and out of the Plan are not allowed.