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| 403(b) Plan |
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A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations and certain ministers. Individual accounts in a 403(b) plan can be any of the following types:
- An annuity contract, which is provided through an insurance company,
- A custodial account, which is invested in mutual funds or
- A retirement income account set up for church employees.
Generally, retirement income accounts can invest in either annuities or mutual funds.
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The features of the 403(b) plan are very similar to the 401(k) plan. Employees may make salary deferral contributions that are usually limited by regulatory caps.
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