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Retirement Plans For Nonprofits In Tarrant
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State:
Multi-State
County:
Tarrant
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US-001HB
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FAQ
A 403(b) plan is available to non-governmental non-profit entities. This plan type is exempt from certain compliance testing and has fewer investment options than a 401(k).
Though 401(k)s are primarily offered by larger for-profit companies, many nonprofit entities also offer 401(k) plans to their employees. In fact, many nonprofit organizations may choose to offer both a 401(k) and a 403(b).
A 403(b) plan is available to non-governmental non-profit entities. This plan type is exempt from certain compliance testing and has fewer investment options than a 401(k).
Pros and cons of a 403(b) ProsCons Tax advantages Few investment choices High contribution limits High fees Employer matching Penalties on early withdrawals Shorter vesting schedules Not always subject to ERISA1 more row •
401(k) plans and 403(b) plans offer very similar benefits. As such, one isn't really better than the other. The main difference is that each plan is offered to employees of different types of companies. Another key difference between the plans is that 403(b) plans also offer a $15,000 catch-up.
In order for a non-profit company to use a SIMPLE IRA, it must have less than 100 employees. The IRS does not categorize SIMPLE IRA plans as qualified plans. Since it was designed for start-ups and small organizations, a non-profit would not have to worry about: Non-discrimination testing.
Popular choices include 403(b) plans, similar to 401(k) plans but tailored for nonprofit organizations, and 401(a) plans, which offer higher contribution limits. Additionally, SIMPLE IRAs and SEP IRAs cater to smaller nonprofits with simpler administrative requirements.
Simplified Employee Pension (SEP) plans are a popular choice among nonprofits. They allow employers to make tax-deductible contributions to individual retirement accounts (IRAs) set up for employees. Contributions are limited to the lesser of 25% of an employee's compensation or $69,000 for 2024.
There are two mandatory retirement program options, the Teacher Retirement System of Texas (TRS), and the Optional Retirement Program (ORP). TRS requires staff and faculty employees who work for at least 20 hours per week for 18 weeks or longer during the September 1 – August 31 plan year to contribute to TRS.