Need Help with your 403b Plan?

Need Help on Your 403(b) Plan?

A very important decision you can make as a school employee is whether to participate in a 403(b) plan (often referred to as a tax-deferred annuity). These plans allow you to put aside funds (elective deferral limit for 2009 is $16,500) on a tax-deferred basis that can supplement your CalSTRS or CalPERS retirement. And, the earlier you invest the faster your investment dollars will grow.

The Internal Revenue Service has put into place new regulations pertaining to 403(b) plans that will substantially change the manner in which school districts offer these plans to school employees. The goal of the new regulations is to bring 403(b) plans into much closer alignment with other voluntary retirement savings plans such as 401(k) and 457 plans.

As a current 403(b) participant or potential new investor, the new IRS regulations may impact you. It is important to make informed investment decisions and there are several resources available to help you. CTA has released a newsletter called The Advisor, summarizing the new IRS regulations and its impact on chapters and members. The newsletter is available on the CTA website at

On November 30, 2004, the California State Teachers’ Retirement System (CalSTRS) launched a website that will allow you to compare approximately 90 vendors and 300 different 403(b) retirement investment products. Called 403bCompare, this website is a free retirement planning tool for all CTA members and school employees. The website,, will assist you in comparing retirement savings investment options. You can go online free of charge to search 403(b) products, and compare product features, including fund descriptions, fees and returns.