403(b)/457

The 403(b) retirement plan acts very similar to a 401(k) plan and provides several benefits including:

• Contributions to the plan are tax deductible meaning that you do not pay taxes on contributions made to the plan.  This also reduces income tax expenses and may very well reduce your tax bracket.  Taxes will be paid on the funds when taken from the account at retirement.

• Roth contributions can be made, but taxes are paid at the time of contribution.  Account balances grow over time, and taxes are not paid on the contributions nor on the interest earned on the account once it is taken out.

• Loans or Hardship withdrawals can be taken from the account if certain circumstances are met.  This will slow the path to retirement but can provide financial relief in a time of need.

• Contribution limits are much higher at $20,500 than the limits in IRAs ($6,000).

Simply put, a ROTH 403(b) plan does not lower your current tax liability and is deducted from your salary after taxes whereas a traditional 403(b) lowers your tax liability now by deducting from your salary before taxes.

In order to establish a new 403(b) and begin contributions, please follow the steps below:

1. Determine which company you would like to invest your contributions with.  

   • A list of Approved Vendors can be found by accessing the NBS website: http://www.nbsbenefits.com/non-erisa-403b-forms/

2. Contact your Financial Advisor or the Approved Vendor of your choosing directly, to obtain and submit all necessary paperwork to open your account.

3. Complete a Salary Reduction Agreement and submit it to National Benefit Services directly.  

   • Please note that SRAs need to be submitted to NBS by the 28th of each month, in order to be processed through NBS and updated in the payroll system.

The Universal Availability Notice will give you basic information about the plan features.  Please review and if you have any plan-related questions, you may contact NBS Customer Service Center at:

Phone: 800-274-0503 option 5

E-mail:  403bsupport@nbsbenefits.com

There is no “open enrollment” period to enroll in or stop contributions to the 403(b) and 457. Initial enrollment and plan changes can be made at any time of the year!!