Eligibility

Eligibility to participate in the 403(b) plan is determined by the employer and must be offered to all eligible employees. Generally, an employee is eligible if they are employed by an eligible employer and are expected to work at least 20 hours per week.

Annual Contribution Limits

For 2023, employees can contribute up to $19,500 to a 403(b) plan, with an additional $6,500 catch-up contribution allowed for those age 50 or older. Employers may also contribute to the plan on behalf of their employees.

Investment Options

A 403(b) plan typically offers a range of investment options, including mutual funds and annuities.

Tax Treatment

Contributions to a 403(b) plan are tax-deferred, meaning that contributions and earnings are not subject to income tax until withdrawn during retirement. Some 403(b) plans may also offer a Roth option.

Vesting

The plan may be subject to a vesting schedule, which determines how much of the employer contributions the employee is entitled to keep if they leave the employer. Employers must follow certain rules for vesting, which may depend on the type of contribution.

Distributions

The plan are generally not allowed until the employee reach age 59 ½ or experiences certain qualifying events. There are required minimum distributions that must be taken from the plan once the employee reaches age 72 (or employees who turned 70 ½ before 1/1, 2020).

Guaranteed retirement income

Employees are guaranteed a specific retirement income, based on a formula that takes into account their salary and years of service with the company.

Responsibility for investment risk

In a DB plan, the employer is responsible for making sure there is enough money in the plan to pay promised benefits to retirees.

Tax advantages for both employers and employees

Employers can deduct plan contributions as a business expense, and employees do not pay taxes on the contributions until they receive the retirement income.

Long-term planning

DB plans are designed to provide retirement income for the long-term. This is particularly important for those who work for government entities.

Initial inquiry
Proposal review
TransGlobal service agreement
Plan setup
Plan implementation
Plan investments

Initial inquiry

STEP 1

Client or agent will complete the Pension Inquiry form or website application to provide information to TransGlobal. The information provided allows TransGlobal to generate a proposal with maximum contributions based on independent variables.

Start Inquiry