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403(b) or 401(k)?


Guest wingnut

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Guest wingnut

We are trying to decide which type of plan a client actually needs?

They are a Community Services District, specifically the water and Wastewater sytems Department. we are considering having a salary deferral plan with a match. This gets a bit more confusing. They also want to offer PERS to their employees. So question #1 is, what is the determining factor for a 403 b.

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What is this organization?

Only 2 types of employees can have 403(B)s:

1. employees of organizations exempt under 501©(3) of the Code (note: only ©(3)s, not any ©); and

2. employees of a state, political subdivision of a state, or an agency or instrumentality of either, who perform services for an educational organization which normally maintains a regular faculty and curriculum and normally has a regulary enrolled body of pupils or students in attendance (e.g., a public school district or a state-owned college).

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