Human Resource Services
Voluntary Plans
403(b) and 457 plans (Tax-Deferred Annuities)
Tax-deferred programs--403(b) and 457 plans--serve to supplement employer-sponsored pension plans. Because 403(b) and 457 plans are designed for long-term planning, employees should use another method to save for immediate needs. Contributions to 403(b) and 457 plans are taken via payroll deduction.
Roth 403(b) Plan (Post-tax savings plan)
Unlike a traditional 403(b) plan, the Roth 403(b) enables individuals to contribute after-tax dollars to an account that will grow tax-deferred. With a Roth 403(b) plan, employees pay taxes as contributions are made and do not lower their taxable income for the contribution year. However, tax-free treatment of distributions and earnings is provided to qualified distributions. A qualified distribution is one that is made five years or more from the date the first Roth contribution was made and the participant reaches age 59½, he or she becomes disabled, or upon the participant’s death.