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403B Plan Meaning & Definition

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Definition of 403B Plan

A 403B plans is a qualified retirement plan offered to teachers and employees of nonprofit organizations. Many school districts, hospitals and municipalities will establish 403B plans to help their employees plan and save for retirement.

Applying "403B Plan" to Securities Exams:

403B plans are often established as Tax-sheltered annuities (TSAs) and tax-deferred accounts (TDAs) are established as retirement plans for employees of nonprofit and public organizations such as:

Public schools (403B)

Nonprofit organizations (IRC 501C3)

Religious organizations

Nonprofit hospitals

TSAs/TDAs are qualified plans, and contributions are made with pretax dollars. The money in the plan is allowed to grow tax deferred until it is withdrawn. TSAs/TDAs offer a variety of investment vehicles for participants to choose from, such as:

Stocks

Bonds

Mutual funds

CDs

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