What You Need to Know
- Sen. Maggie Hassan, D-N.H., is one of the original S. 1703 sponsors.
- A 403(b) MEP plan that included two or more annuity contracts would be treated as a single plan.
- Rules for church plans would be different.
Three senators have introduced a bill that could expand the market for multiple employer plans (MEPs).
Sen. Charles Grassley, R-Iowa, has joined with Sen. James Lankford, R-Okla., and Sen. Maggie Hassan, D-N.H., to back S. 1703, the “Improving Access to Retirement Savings Act” bill.
S. 1703 would let the schools, charities and other nonprofit employers that offer 403(b) tax-sheltered annuity plans team up with other nonprofit employers to offer their employees retirement benefits through MEPs.
The list of organizations supporting the bill includes the American Council of Life Insurers, the Insured Retirement Institute, the American Benefits Council and the American Retirement Association.
A 403(b) Plan Primer
A 403(b) plan typically looks like a 401(k) retirement plan, but it operates under a different set of rules — Section 403(b) of the Internal Revenue Code, rather than Section 401(k).
The IRS has posted an extensive 403(b) plan information page.
In practice, one big difference is that 403(b) plans are more likely to place assets in annuities.
Some 403(b) plans provide the benefits using group annuities. Others provide the benefits by helping participants contribute money to individual annuities.