403(b) Plan in Brief

A 403(b) retirement plan is similar to a 401(k) plan. Both plans allow participants to set aside additional money for retirement. The 403(b) plan is designed for employees of public schools and is authorized by section 403(b) of the Internal Revenue Code.

Through the program, you may set aside a portion of your income for retirement and invest it. The WCBOE 403(b) plan offers investment choices with the Lincoln Financial Group and includes a traditional (pre-tax) and a Roth (post-tax) option.  View the 403(b) Universal Availability Notice.

You have the option of contributing pre-tax and/or post-tax funds to your 403(b) account. A post-tax funds 403(b) is known as a Roth 403(b). Both options offer you the following:

• Participation plan is strictly voluntary

• Allows you the opportunity to accumulate additional retirement funds, as a supplement to your MD State Retirement System (MSRS) or Aetna Retirement pension

• Provides you the option to either contribute a percent of your salary or a flat dollar amount determined by you which is deducted from your paycheck. The amount of income that can be contributed is subject to IRS limitations. Click here for the 403(b) Contribution Limits.

• You may begin participating in the 403(b) Plan at any time.

• You may make changes to your 403(b)-contribution amount at any time.

• A 403(b) account is an individual account with no vesting schedule - you decide how much to contribute and how to invest your contributions.

Why participate in the 403(b) Plan?

Many retirement experts suggest that a retirement income level of at least 70% of your final salary is a good target for people saving for retirement. Many people who retire at age 65 could live 20 or more years in retirement. Proper planning for those years is essential to ensuring that you have the income you need. Depending on your personal goals, your MSRS or Aetna pension alone may not meet your retirement objectives.

What is a 457(b) Plan?

The 457(b) is a retirement plan available to public school employees. It is sometimes referred to as deferred compensation. The 457(b) is named after the section of the IRS code governing it.
 
The 457(b) can be an excellent way to save money for retirement. It can serve as a supplement to a traditional pension plan or other retirement plans such as the 403(b) plan. You determine the pre-tax amount that you want to defer (up to the IRS maximum) and how it is to be invested. 

Eligibility

All employees of WCBOE are eligible to participate.  

How a 457(b) Works

Employees may enroll in the 457(b) Plan through Lincoln Financial. Contributions to a 457(b) are made on a pre-tax or post tax basis. The amount by which the salary is reduced (payroll deduction) is directed to investments offered through the Lincoln Financial. These contributions are called elective deferrals and are excluded from the employee’s taxable income. Contributions grow tax-deferred until the time of retirement, when withdrawals are taxed as ordinary income. Click here for the 457(b) Contribution Limits.

To enroll in the 457(b) plan, change the amount of your contribution or your investment allocations, or to update beneficiary information, schedule an appointment with the onsite Lincoln Financial Consultant.  Go to the online scheduler and select from the available time slots. Once you've set up your meeting, you'll receive a confirmation email as well as a reminder email the day before the appointment. Appointments are thirty (30) minutes in length.