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164:(ERISA) does not require 403(b) plans to be technically "qualified" plans (i.e., plans governed by U.S. Tax Code 401(a)), but 403(b) plans have the same general appearance as qualified plans. While the option is available it is not known how prevalent or if any 403(b) plan has been started or amended to be ERISA-qualified. This is because the main advantage of ERISA plans for participants has been in the event of
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Beginning in 2006, 403(b) and 401(k) plans may also include designated Roth contributions, i.e., after-tax contributions, which will allow tax-free withdrawals if certain requirements are met. Primarily, the designated Roth contributions have to be in the plan for at least five taxable years and
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On
December 9, 2008, the IRS gave 403(b) plan sponsors a one-year reprieve for adopting a written plan document. While the relief provisions from the IRS give 403(b) sponsors a full year to adopt a written plan document, the plans still must operate in compliance with 403(b) plan requirements. If a
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Salary-deferral contributions are not subject to complicated discrimination testing. 403(b) plans are instead subject to universal availability which, briefly and in general, means all employees must be permitted to make salary-deferral contributions. 403(b) plans also have simpler and less costly
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extended bankruptcy protection to 403(b) plans. While they are different in some fundamental ways, qualified and unqualified plans appear almost the same to the participant and the options available are very similar. The only important differences for the participants are some additional ways that
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A church plan that is not subject to ERISA is not required to file an IRS Form 5500, nor is it required to distribute summary annual reports, summary plan descriptions, or summaries of material modifications to plan participants. Church plans are generally subject to state law though. A defined
231:, 264 B.R. 415 (Bankr. E.D. Mich. 2001) Judge Spector held that the fixed-income annuity was not such a trust and could be reached by creditors. The variable account was held to fall within 541(c)(2) and was thus protected. Under the revised bankruptcy laws, 403(b) accounts,
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an ERISA plan (the employer makes contributions to employee accounts) there are additional restrictions and administrative issues applicable to those employer contributions, but not if a plan of a government employer which is not subject to
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From a plan administration standpoint, 403(b) plans do not have many of the same technical difficulties that 401(k) plans do, such as discrimination testing, especially if the plan is not an ERISA plan. If the plan
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A church plan is a retirement plan established and maintained by a tax-exempt church, a convention of churches, or an association of churches for its employees. Church plans are not subject to the
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Before the passage of the bankruptcy reform act in 2005, a 403(b) that was not an ERISA plan was not accorded protected status as property that could be claimed as exempt by the debtor under the
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person has taken a 403(b) plan and their age is less than 59½, then they cannot initiate an early withdrawal unless they can demonstrate a triggering event such as financial hardship,
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202:(IRS) Form 5500, including not having the independent auditor requirement applicable to qualified plans with more than 100 plan participants.
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250:. Some critics argued that this is disparate treatment of similar pension schemes and that more consistent protection was called for. The
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they can withdraw employer money, not salary-deferral money, before the typical 59½ age restriction, but only if the plan is funded with
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was protective of pensions before the bankruptcy law revisions, giving those pensions the same protection as a
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Please help update this article to reflect recent events or newly available information.
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Text of the
Employee Retirement Income Security Act - ERISA - 29 U.S. Code Chapter 18
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October 2007
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Employee
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Publication 571 (12/2009), Tax-Sheltered
Annuity Plans (403(b) Plans)
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until the money is taxed as income when withdrawn from the plan.
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organizations), cooperative hospital service organizations, and
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Employee salary deferrals into a 403(b) plan are made before
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Bankruptcy Abuse
Prevention and Consumer Protection Act
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benefit church plan is not required to pay subject to
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Type of retirement/pension plan in the United States
617:Tax-advantaged savings plans in the United States
416:"401(k) and 403(b) Plans: What's the Difference?"
139:may be compromised due to out-of-date information
277:Employee Retirement Income Security Act of 1974
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392:"How is a 403(b) different from a 401(k)?"
267:you have to be at least 59 years of age.
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162:Employee Retirement Income Security Act
101:403(b) plans are also referred to as a
612:Retirement plans in the United States
470:. findUSlaw. Retrieved on 2016-09-02.
85:Required Minimum Distributions (RMDs)
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300:Pension Benefit Guaranty Corporation
75:. It has tax treatment similar to a
481:"In re Estate of Barnes (Majority)"
254:took this argument to heart in the
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565:Sciscoe, Tara Schulstad (2017). "
242:For this reason, having an ERISA
219:Bankruptcy protection before 2005
198:annual reporting requirements on
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342:Taxation in the United States
332:Individual retirement account
302:plan termination insurance.
94:is paid and allowed to grow
79:plan, especially after the
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373:. Internal Revenue Service
200:Internal Revenue Service
567:Church Retirement Plans
282:A church plan may be a
262:After-tax contributions
337:List of finance topics
256:2005 bankruptcy reform
252:United States Congress
244:anti-alienation clause
607:Internal Revenue Code
292:deferred compensation
103:tax-sheltered annuity
59:Internal Revenue Code
551:C.F.R. § 1.410(d)-1.
367:"403(b) Plan Basics"
288:defined contribution
225:U.S. Bankruptcy Code
440:"The 403(b) Basics"
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540:§ 1003
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327:Form 1099-R
290:plan, or a
601:Categories
524:§ 414
490:2016-09-02
449:2016-09-02
425:2023-05-18
401:2016-09-02
377:2016-09-02
353:References
213:disability
206:Compliance
166:bankruptcy
117:Regulation
92:income tax
55:non-profit
44:retirement
18:403b plans
237:creditors
194:testing.
175:annuities
69:ministers
62:501(c)(3)
510:(33)(A).
322:457 plan
306:See also
286:plan, a
177:and not
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526:(e)(1).
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371:irs.gov
71:in the
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