What Is A 403 B Retirement Plan? 
403 -LRB- b -RRB- Plan EmployerInformation - What is a 403 -LRB- b -RRB- plan ? Its a great benefit to both your employees and you!A 403 -LRB- b -RRB- plan is a tax-deferred plan that can be set up forany public school , university , college or non-profit 501 -LRB- c -RRB- -LRB- 3 -RRB- organization . Generally , any employee may participate as away to invest for retirement . A 403 -LRB- b -RRB- plan benefits more than just your employeesIt benefits your organization . Help reward and retain loyal employees while attractingnew , well-qualified ones . Maintain a positive work environment and enhance yourreputation as a progressive , caring organization , with littlecost to you . It benefits you in your goal to prepare for yourown retirement . You will have a high-quality plan to build a supplementaryretirement income while saving on taxes today . You have the ability to choose from a wide variety ofinvestment options to fit your goals . How does a 403 -LRB- b -RRB- plan work ? Contributions - You and your employees can contribute money on a pre-taxbasis . This means you can afford to contribute more than ifyou put money aside after taxes were deducted . And , unlike ataxable investment , earnings on the account compound taxfree until the money is withdrawn . Then both contributionsand earnings will be treated as taxable income . A pre-taxcontribution of up to $ 17,500 may be made in 2013 . Forthose 50 and older , a catch-up contribution of $ 5,500 maybe made . Additional catch-up contributions may be madeby those with at least 15 years of service with a qualifiedemployer . These limits may increase in future years.You may be able to contribute to a 457 -LRB- b -RRB- Governmentalplan as well , and double your contributions . For example , in2013 , the maximum contribution to a 457 -LRB- b -RRB- Governmentalplan is normally $ 17,500 . That can be combined with the403 -LRB- b -RRB- plan normal contribution limit of $ 17,500 for a totalof $ 35,000 invested tax deferred . Catch-up contributions canincrease this combined limit even more . Employer match You may choose to have a plan available for just youremployees to easily contribute money for their retirement.Or , you can go a step further and offer additionalcontributions where you match all or a part of employeecontributions . The plan does not require an employer match , but its a great way to encourage participation and is apowerful tool in attracting and retaining employees . If youchoose to make matching contributions , they do not counttoward the 403 -LRB- b -RRB- plan limits on employee contributions . Roth option - You may choose to offer a Roth 403 -LRB- b -RRB- option . Under aRoth option , employee contributions are made on an aftertax basis . However , a distribution from a Roth 403 -LRB- b -RRB- TSAaccount is completely free of federal income tax if it meetsboth of the following requirements : It is made after the end of the five year period that beginswith the year that the employee made his or her first Roth403 -LRB- b -RRB- TSA contribution to your plan . It is made after the employee reaches age 59 , becomesdisabled or dies . Access to account balances-You can select a time period for employees to become fullyvested in the employer-matching portion of the 403 -LRB- b -RRB- plan.Note that employee contributions are always 100 % vested.Distributions can be made only when participants severemployment , reach age 59 , become permanently disabledor experience financial hardship , or are a reservist called toactive duty for 180 days or more or for an indefinite period.The employer plan may impose additional restrictions . Unless the distributions are rolled over to an eligibleretirement plan , they will be taxed as ordinary income.Distributions before age 59 may also be subject to an IRS10 % penalty tax . Distributions attributable to employercontributions are only allowed on severance of employmentor occurrence of another event as provided by the plan . 