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Beau

401(k) To 403(b)

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Does anyone know where I can find pros and cons of moving from a 401(k) plan to a 403(b) plan...not for an individual but for employer concerns. Currently there is a 401(k) plan in force and we are investigating moving to a 403(b).

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I assume you are a non profit or public school entity because only those types can have a 403b and 401K. Is the 401k contributory or non-contributory. Will the 403 be contributory or non-contributory. Do you know that the combined total contributions (salary reductions) made to a 401(k) AND a 403b may not exceed $12,000 for 2003? This is not the case if you offer a 457(b) plan. In other words, if you offer a 457 AND a 401(k) or a 457 and a 403(b) a participant may contribute the maximum to each plan of the two plans.

 

Employer involvement is non-existent (except for forwarding the salary reduction to the vendor for investment under employee instructions) in a 403b arrangement that is funded only through salary deferrals. There is substantial employer involvement as you know with the 401(k). The same holds true with the 457(b).

 

Peace and Hope,

Joel

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