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What is the ERISA Title One 403(b)?

The ERISA Title One 403(b) is an employer-sponsored retirement plan for 501(c)(3) organizations. These plans are subject to the

annual

governmental testing and reporting requirements of Title One of ERISA.

ERISA Title One 403(b)

At A Glance

ERISA Title One 403(b) Benefits

Employer Benefits

• Design an arrangement similar to a 401(k) that includes matching contributions and other employer contributions.

• Attract and retain quality employees.

• Improved employee morale, productivity and employer/employee relations.

Employee Benefits

• Save for retirement with pre-tax dollars.

• Earnings are tax deferred until withdrawn.

• Contribution limits are greater than those of IRAs.

• Contribution amounts are flexible.

• Special salary-deferral contribution limits for tenured employees may allow for greater retirement savings.

ERISA Title One 403(b)

Administrator Testing	Required annually.
Establishment	New plans must be established by the employer’s fiscal year end.
Employee Contribution Limit	Maximum employee deferral is the lesser of 100 percent of income or $16,500.
Catch-up Contribution	Catch-up provision of up to $5,500 for participants age 50 or older.
Employer Contributions	25% company limit on discretionary and matching contributions combined.
Loans Available
Total Employee/Employer Max Contribution	2010 plan year: $49,000.
Total Employee/Employer Max Contribution with Catch Up	2010 plan year: $54,500.
Employee Eligibility Requirements	One year with 1,000 hours of service AND 21 years old.
Vesting	Employee contributions are 100 percent vested. Employer contributions may be subject to a vesting schedule if elected by the employer in the Plan Adoption Agreement.