What is a 403(b) Plan?

A 403(b) plan is a retirement plan for specific employees of public schools, tax-exempt organizations and certain ministers. These plans can invest in either annuities or mutual funds. A 403(b) plan is also another name for a tax-sheltered annuity plan, and the features of a 403(b) plan are comparable to those found in a 401(k) plan.

Benefits of a 403(b) Retirement Plan

Earnings and returns on amounts in a 403(b) plan are tax-deferred until withdrawn. For example, if “Tim” was earning $4,000 per month and contributing $700 to his 403(b) plan, his taxable income for the month is $3,300. Employees age 50 or over can make catch-up contributions, which increases the opportunity to defer taxation. The Internal Revenue Service sets the annual limits.

Roth Option

Some of the approved vendors offer a ROTH option. A Roth 403(b) is funded with after-tax contributions from the participant. The participant does not get a tax deduction in the year that contributions are made. However, earnings and returns on amounts in a Roth 403(b) are tax-deferred if the withdrawals are qualified distributions.

403 (b) and 457 Plan Vendors

Midland Public Schools utilizes a third party administrator to manage its plans, MEA Financial Services. (MEAFS) All transactions and form submissions are processed by MEAFS. Contact information is as follows:

Leslie Brown, TPA Coordinator
800-292-1950, Option 4
lbrown@mea.org

Choosing your Plan and Your Vendor