Expand Your Practice with Purpose: Tap Into the Untapped Power of 403(b)(9) Plans

Are you positioned to serve one of the most values-driven relationship-centered client segments in the retirement market? If you’re exploring growth beyond traditional 403(b) or 457(b) channels, it’s time to give the 403(b)(9) plan a closer look.

The 403(b)(9) plan, specifically designed for employees of faith-based organizations, presents a distinctive opportunity. This plan not only offers the traditional benefits of tax-deferred growth and flexible employer contributions but also includes unique features such as life insurance integration and housing allowance provisions for clergy. These attributes make 403(b)(9) plans an attractive option for both employers and employees within faith-based institutions.

Key advantages of 403(b)(9) plans for faith-based employers and their employees

Tax-deferred contributions and growth

Contributions to 403(b)(9) plans are made on a pre-tax basis, reducing taxable income for employees. The contributions grow tax-deferred until withdrawal, enhancing the potential for accumulation.

Flexible employer contributions

Employers have the discretion to offer matching contributions, discretionary contributions, or none at all, allowing customization to suit their financial capabilities and organizational goals.

Life insurance integration

Unlike traditional 403(b) plans, 403(b)(9) plans permit the inclusion of life insurance. This feature enables employees to incorporate products like Indexed Universal Life (IUL) insurance into their retirement strategies, providing death benefit protection and potential cash value accumulation. Additionally, the Charitable Matching Gift rider enhances the appeal by offering matched donations upon the insured’s death, benefiting the sponsoring organization.

Housing allowance for clergy

Ordained, licensed, or commissioned ministers can designate a portion of their retirement distributions as a housing allowance, which is excludable from gross income for income tax purposes. This provision offers significant tax savings and is unique to 403(b)(9) plans.

Non-ERISA plan benefits

403(b)(9) plans are exempt from the Employee Retirement Income Security Act (ERISA), reducing administrative burdens and costs. This exemption allows for greater flexibility in plan design and operation.

Resources to Support Client Engagement

To assist in communicating the benefits of 403(b)(9) plans, the following resources are available:

Boost Your Earnings with the Slot Bonus Program

Get rewarded for growing your business. Our Slot Bonus Program offers you additional compensation when you successfully open a new payroll slot.

To qualify:

• Submit the Slot Bonus Request Formbefore submitting your first application.
• Review and follow the Slot Bonus Program Rulesand Employer Rules of Engagement.

You will also need this Employer Information Form.

We’re Here to Help

Click here to contact your Retirement Services Relationship Manager.