403(b) Rookie

[Guest Jerry]

The bank that I work for is thinking about taking on custodianship and record keeping of a 403(b) plan. This would be our first endeavor into this plan type. What are the major differences between a 401(k) and 403(b) plan? What are some things to watch out for in deciding whether to take on the plan?

Any insight anyone can provide would be greatly appreciated.

[ljr]

Id ask yourself if it makes economic sense to learn what you'd need to know to administer this plan properly. While a 403(b) can look a lot like a 401(k), it's not exactly the same thing and the problems arise in the details. We don't handle any 403(b)'s now but my recollection is that one difference is that your cannot have a waiting period to defer in a 403(b). Also, you do not need to test the deferrals. Try The ERISA Answer Book. Good luck!