A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers.
Generally, retirement income accounts can invest in either annuities or mutual funds.
Also known as a "tax-sheltered annuity (TSA) plan".
The features of a 403(b) plan are very similar to those of a 401(k) plan. Employees may make salary deferral contributions that are usually limited by regulatory caps. 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
- A retirement income account set up for church employees