Ellie Lowder

Yes - you are permitted, under the Code, to aggregate the values of both plans (since they are sponsored by the same employer) to determine loan eligibility. Some loan provisions, however, will not permit borrowing on any value not held by the provider from whom the loan is taken. I believe only a few loan provisions DO permit other values to be considered.

Yep, I have. The CREF portion (equity options) are both cashable & transferable - the fixed portion (TIAA) is quite often tax-free transferred over the 10-year payout period to other annuities or custodial mutual fund options that permit flexibility. However, I do stand (sort of) corrected - how could I overlook the biggest? Bad day, I guess. The voluntary TSA portion does not have the limitations that the employer matching program has.

I am not aware of any 403(B) annuities that permit only periodic payments - only about 1% of participants today annuitize - instead, the 403(B) annuity (or mutual fund, of course) is used for systematic withdrawals - random lump sum needs. Of course, we might see that change with growing life expectancy!

FYI! A new message board under Continuing Professional Education has been added to respond to queries about continuing education programs specific to the 457(B) and 403(B) market segment. It appears under "National Tax Sheltered Accounts Association" where questions can be posed about the accreditation program (CRS/MCRS), and educational symposiums.

New Message Board under Continuing Professional Education. For queries about professional education in the 403(B) and related markets, a new message board "National Tax Sheltered Accounts Association" has been added. There, we will respond to queries about the CRS/MCRS accreditation program, as well as the Educational Symposiums offered through the NTSAA. The new Board responds to interest expressed in educational programs specific to this market segment. FYI!

ADP is not correct. I'm not sure why they take this position, but there is no coordination between the 414(v) catch up and the IRC 402(g)(7) increased limit for certain employees w/15 or more years of service. You can use both.

Unfortunately, Tom, they offer their list only for purchase. Since I am attempting to compile the names of 457 TPAs that do not sell product/investment options, as a courtsey to my callers (of which I have thousands), I had not planned to pay for a list. I do not plan to generate income from the information - e.g., it is done to be helpful, only. Thus, I must begin to compile a list informally - and, I appreciate the help. Thanks.

Joel, I am actually looking for TPAs that administer 457(B) plans, and am happy to get the specific names/responses that are being provided. Yep, I would like to have a national directory; however, have learned that this is difficult to obtain - no good source has surfaced. Thank you for your comments; however, I do want to begin to compile a list for use in referring callers. I appreciate all of the info! I am amazed at how many queries I have been getting for those names! And, I appreciate the Benefits Link Message Boards as a source of all types of information - thanks, Dave Baker!

As a 501©(3) organization, you are eligible to establish a 403(B) plan in your own right. With an elective deferral-only 403(B) plan, you would not be an ERISA plan (and have no need to file the form 5500) if you are following the ERISA exemption requirements contained in DOL Reg. 2510.3-2 (limited involvement, etc.). If you are making employer contributions, then you are an ERISA plan - the 5500 will be one of the obligations - however, reporting on that form is very abbreviated for a 403(B) plan. There are sometimes 501©(3) orgs. that are also governmental organizations (usually district/county hospitals that have also received the 501©(3)designation) - those orgs. are exempt from any Title I, ERISA requirements.

Yes, I agree The 403(B) Answer Book is a good Q&A resource. There is also a book "The 403(B) & 457(B) Primer Plus" available through the benefits link bookstore - it is an 11-chapter book devoted to 403(B) & 457(B) plans, and chapter 11 is devoted entire to churches and church organizations. As the co-author, I believe it is pretty good - certainly widely used.

I am an independent consultant in the retirement plan markets for non-profit employers and am routinely being asked how to locate TPAs that administer 457(B) plans - preferably on a national basis. Any clue where I can find that information? Thank you much!

See new paragraph 457(e)(17) which permits direct transfers to purchase service credits in governmental DB plans. Both 457(B) assets and 403(B) assets (in IRC 403(B)(13)) can (under the Code) now be directly transferred to for the purchase of credits, provided that the defined benefit plan permits it.

In the case of a church 403(B) (e.g., the plans of religious organizations), be careful, because a church/church organizations could affirmatively elect to be covered under ERISA - and, in my long history w/403(B) and related plans, I have found some that have done exactly that.

You are welcome. I forgot to say that there is a tiny bit of "clean up" in 403(B)(3) that permits employers to make contributions on behalf of departed employees for a period of 5 tax years after the year of severance of employment - still, not too good, but we knew what it meant anyhow, yes? Deemed IRAs were also extended to 457(B) gov't plans - guess that's about it for 457 and 403(B). I still have to go through the bill with a "fine tooth comb" to report it out to the industry, so may have missed something!

Yep - it did change the compensation definition to make life easier - now the same as 415©(3)!

Among other things, the includible compensation definition used for 457 plans is now that described in Section 415©(3) removing the old definition of the amount actually reported as taxable. Also, some clean up language (e.g., removing 403(B) references to nonforfeitures by elimination 403(B)(6), and changing wording in 403(B)(1). Provides real clarity that aggregation of 50+ catch up options do not extend to 457 plans, e.g., just as we thought, there are two separate age 50+ catch ups for those contributing to both a 457(B) and a 403(B) (or other elective deferral) plan.

Mike, the NTSAA Educational Institute has available a designation program that is directly applicable to retirement plans/accounts for public education and 501©(3) employers. It is the most comprehensive course SPECIFIC to 403(B), 457(B) and other related plans I have seen. Four courses lead to the Certified Retirement Specialist designation, while two additional courses result in the Master CRS designation. Great stuff. The NTSAA web site is linked to the Educational Institute where more can be learned - www.ntsaa.org. It also links to The 403(B) and 457(B) Primer Plus, the book co-authored by Kristi Cook & me and revised with all of the EGTRRA changes - much of which is utilized in the courses, along with a great deal of other credible material. You might also be able to access it and get to the certification web site in Benefits Link book store where the Primer Plus is listed.

Nondiscrimination requirements for elective deferrals to 403(B) plans (IRC 403(B)(12)(A)(ii) have not been changed recently. Under the "universal eligibility rule" you must permit employees who "normally" work 20 or more hours per week to participant if ANY employee is permitted to do so. You are not required to exclude employees who work less than 20 hours per week! That Code section does include those you are permitted to exclude.

The National Tax Sheltered Accounts Association will be shortly issuing the new NTSAA Compliance booklet which contains sample Service Provider and Salary Reduction Agreements. If you are a member, you'll automatically get the revised booklet!

501© organizations are eligible to establish only Top Hat 457(B) plans because of ERISA issues. Since those plans can benefit only HCEs or select group of management employees, I rather suspect that is another reason age 50+ catch ups are not permitted.

If you mean "was the intention to allow two separate 415© limits - one for 401(a)/401(k), and another for 403(B)" - I am assured it was intentional. Keep in mind that the ownership and control issue (e.g., participant owns/is in control of the 403(B) plan)has been the case with 403(B) plans for as long as I can remember (and that is a long time), and, with the exception of catch up option C, has always resulted in two separate limits when the plans are sponsored by the same employer. The technical corrections in EGTRRA was because the language needed to be re-added after the repeal of 415(e) unintentionally took it away. The only real change for next year in that particular issue is that option C goes away - thus, there will be two limits (except in the case of ownership of an outside business as I said. On the other hand, I never say never. Have already heard an unsubstantiated rumor that 403(B) "non-aggregation" may be the topic of new legislation at some point - after all, it flies in the face of benefiting rank and file employees and is usually constructed to benefit the honchos. We'll see. Pretty strong lobbies want to keep it the way it is.

The consensus is that we still have the two separate 415© limits, and the section you quoted, Mike, is a technical correction to the prior repeal of 415(e). Keep in mind that you must aggregate the 415© limits in situations where a 403(B) participant has an outside business which he or she controls, and has a qualified plan or a SEP. Finally, Option C will not be an issue after January 1, 2002, since as indicated, it is repealed.

Michael, in my view this codifies previous private letter rulings which permit EMPLOYERS to make post retirement contributions - e.g., an employer who wishes to do so (early retirement incentive, replacement of severance pay) can contribute up to 100% of includible compensation maxed at $40,000 per year for up to five tax years after retirement.

EGTRRA did repeal the election (IRC 403(B)(2) was repealed in its entirety) that permitted those earning under $17k to contribute 100% of includible compensation; however, the other election (IRC 415©(7)) still exists in changed form. After 1/1/02, IRC 415©(7) will permit a contribution of up to $10,000 (subject to the $40,000 maximum that can be used under this election)even if the participant does not earn $10,000. Thus, an employer (non-salary reduction) contribution could be made for very low-paid clergy and other employees who do not earn enough to contribute much on their own!

The most recent publication 571, dated June, 2001, says that 403(B) Contributions (for the years you are eligible to participate in BOTH a 457(B) and a 403(B) plan) do count as contributions for purposes of the 457(B) catch up election. It also says that if "you elect to defer the maximum amount to your 403(B) account, you cannot use the catch-up limit" in the last 3 tax years before retirement. Even if you don't elect to defer the maximum amount to the 403(B) plan, the amounts you did contribute to the 403(B) plan are taken into consideration for purposes of the 457 catch up. However, if you weren't eligible to participate in the 457(B) plan (which many public school employees aren't), no 403(B) contributions are counted. Unless otherwise clear in regulation to dispute it, this would be the position the IRS would take, I would think. Bummer!