The Main Differences Between a 403(b) and a 403(3)(b)(9) Retirement Plan

If you’re an organization with 501(c)(3) status, there are two top retirement plans that you may want to consider: a 403(b) and a 403(b)(9).

As a reminder, organizations that operate for specific purposes such as religion, charity, science, testing for public safety, literary, and education are determined as tax-exempt under the Internal Revenue Code Section 501(c)(3).

Although 403(b) and 403(b)(9) retirement plans are very similar, they also have some key differences that organizations with 501(c)(3) status should know about. Today, we’re going to look at the details of each plan and why one may be a better option over the other.

What is a 403(b) retirement plan?

403(b) retirement plans are generally for employees of certain 501(c)(3) tax-exempt organizations, public education, and ministries. How do you know if you have 501(c)(3) status? Go to the IRS Select Check website and search for name or EIN.

What is a 403(b)(9) retirement plan?

A 403(b)(9) is a sub-section of the 403(b) plan, which is uniquely designed for church organizations. This means that employees of a church or church-related organization are eligible to participate in a 403(b)(9) retirement plan.

While 403(b) retirement plans are for all employees of 501(c)(3) status, 403(b)(9) retirement plans are designed specifically for the needs of ministries that have a church designation or churches.

How are 403(b) plans different from 403(b)(9) plans?


Participation Flexibility

403(b) plans must abide by universal availability requirements when there is an elective deferral. This means that most employees (certain exclusions may apply) are eligible to make elective deferrals into the retirement plan.

403(b)(9) plans, on the other hand, allow the employer to choose who can participate in the plan (based on certain requirements). Yes, this means they can decide who participates in the plan by establishing restrictions, which commonly include age or years of service.

ERISA Regulations

A big difference between 403(b) and 403(b)(9) plans is the ERISA regulations. ERISA stands for Employee Retirement Income Security Act and is a set of rules that are established to protect individuals in the plan from fiduciary wrongdoing. Under ERISA, employers must notify participants of benefit plan terms.

Most 403(b) plans fall under ERISA regulations, while 403(b)(9) plans — or church plans — fall under Non-ERISA regulations. Although Non-ERISA plans do not protect participants from fiduciary misconduct, they are easier to administer, less expensive, and have fewer reporting and disclosure requirements.

While 403(b)(9) plans are always Non-ERISA, 403(b) plans can be either ERISA or Non-ERISA. The employer has the option to choose ERISA exemption or to pick ERISA coverage. But, if a Non-ERISA 403(b) plan is chosen, employers can not contribute to the plan and participation is voluntary.

This only applies to Non-ERISA 403(b) plans. For Non-ERISA 403(b)(9) church plans, the employer has the choice to contribute to the plan and can decide who participates in the plan.

To recap, here are the main differences between 403(b) and 403(b)(9) retirement plans:

403(b) Plans:

  • Are for 501(c)(3) tax-exempt organizations
  • Must abide by universal availability
  • Usually fall under ERISA regulations, unless the employer chooses Non-ERISA
  • If the employer chooses a Non-ERISA 403(b) plan, they cannot contribute to the plan and participation is voluntary
  • Are more expensive and timely to administer if they fall under the ERISA guidelines
  • Protect participants from fiduciary wrongdoing if ERISA is chosen


403(b)(9) Plans:

  • Are for 501(c)(3) tax-exempt organizations, but more specifically for churches or church designated ministries
  • Permits the employer to choose who participates in the plan
  • Always falls under Non-ERISA regulations
  • Are easier and less expensive to administer, but participants are not protected against fiduciary wrongdoing

At TruthPoint Financial, we help you decide which retirement plan best fits your organization’s needs. We offer expert guidance and provide a foundation of truth, transparency, and trust — so you can be confident that your retirement plan is in good hands.

Contact us today for a personal, one-on-one conversation about your retirement planning needs and how we can provide the best solution for your situation.


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