Guest vinson7 Posted April 10, 2009 Share Posted April 10, 2009 Why would a church choose the 403b7 over 403b9? I know the "9" plan is for church only, but does it have any other benefits to its plan besides that? I can't seem to find anything? Link to comment Share on other sites More sharing options...
Guest Danny Miller Posted April 10, 2009 Share Posted April 10, 2009 Why would a church choose the 403b7 over 403b9? I know the "9" plan is for church only, but does it have any other benefits to its plan besides that? I can't seem to find anything? A (b)(9) is not limited to registered mutual funds in terms of its investments. In addition, a (b)(9) can "self-annuitize" payments to participants (This is a provision that would typically only be important to a denominational 403(b) plan.) In addition, self-employed ministers and ministers serving outside the pulpit can contribute directly to a 403(b)(9) and deduct such contributions on their tax return pursuant to Code section 404(a)(10). Those are the primary advantages of a (b)(9). The absence of a limitation on investments is the main reason (b)(9) was added to the Code, so that denominational 403(b) programs could provide for their own investment funds, most of which are invested with denominational faith and belief in mind. Hope this helps. Link to comment Share on other sites More sharing options...
Guest vinson7 Posted April 12, 2009 Share Posted April 12, 2009 Thanks!! 403b9 is not just for ministers is it? Other employees of the church can contribute, correct? So really the only difference between the 7 and 9 is the allowable investment choices? Thanks!!! Link to comment Share on other sites More sharing options...
Guest vinson7 Posted April 12, 2009 Share Posted April 12, 2009 Thanks!! 403b9 is not just for ministers is it? Other employees of the church can contribute, correct?So really the only difference between the 7 and 9 is the allowable investment choices? Thanks!!! also, are the contribution limits the same for the 7 as for the 9? Link to comment Share on other sites More sharing options...
John Feldt ERPA CPC QPA Posted April 13, 2009 Share Posted April 13, 2009 The same contribution limits apply. The other difference is the document. A church plan sponsor that only provides mutual funds and annuities as investment options [b(7)] is not required to executed a written plan. If they offer investments under b(9), (retirement income accounts), then they must execute a written plan that conforms with the final 403(b) regulations. Link to comment Share on other sites More sharing options...
Guest vinson7 Posted April 13, 2009 Share Posted April 13, 2009 The same contribution limits apply. The other difference is the document. A church plan sponsor that only provides mutual funds and annuities as investment options [b(7)] is not required to executed a written plan. If they offer investments under b(9), (retirement income accounts), then they must execute a written plan that conforms with the final 403(b) regulations. Thanks- You can discriminate in the 403b9 plan, correct, or does everyone get the same matching contribution amount? Link to comment Share on other sites More sharing options...
John Feldt ERPA CPC QPA Posted April 13, 2009 Share Posted April 13, 2009 b7 and b9 do not differ in that regard. If the sponsor is truly a church, then a lot of things do not apply. One of the many things to note is found in Notice 2001-46, article I: "I. PURPOSE This notice provides relief from the application of the nondiscrimination requirements of the Internal Revenue Code for certain church and governmental plans. In particular, this notice extends the effective date of regulations under §§401(a)(4), 401(a)(5), 401(l), and 414(s) of the Internal Revenue Code for nonelecting church plans until further notice, but in no case earlier than the first plan year beginning on or after January 1, 2003." I have not seen "further notice" in this regard from the IRS yet. Link to comment Share on other sites More sharing options...
Guest nielsen522 Posted April 26, 2010 Share Posted April 26, 2010 Thanks!! 403b9 is not just for ministers is it? Other employees of the church can contribute, correct?So really the only difference between the 7 and 9 is the allowable investment choices? Thanks!!! also, are the contribution limits the same for the 7 as for the 9? The contribution limit for both are just the same. The IRS created the 403(b) in 1958. In 1974 Congress added paragraph (7) which allowed employees to set up retirement plans directly with mutual fund companies. Prior to this change contributors were limited to investment choices offered by insurance companies. Throughout this site the term 403(b) is intended to mean all of the following: 403(b), 403(b)(7) and TSA. Link to comment Share on other sites More sharing options...
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