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MattP

403(B) Vs. 403(B)7

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As I dig deeper into all of the paperwork and fine print of my district's plan, I become more frustrated (and confused). Is there a difference between a 403(b) plan and a 403(b)7 plan? I just read the Participant Fee and Annual Disclosure Statement for my district's 403(b)7 Mutual Fund Platform ("Plan"). I uncovered more Administrative Expenses. These fees are different than the "B7 Mutual Fund Product Fees" I found on our 2016 Universal Availability Notice. Do I pay both sets of fees? I plan on calling my district and our TPA.

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Prior to 1974, 403(b) money could only be invested in annuity products. Paragraph (7) was added to IRC governing the 403(b) in 1974 (during the Ford administration!!) allowing mutual funds. This is often called a 403(b)(7) custodial account.

 

It is interesting that all these years later, the majority of 403(b) money is still invested in annuity products Latest 403(b) Market figures

 

- Dan

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