Editing 403(b) (section)

== Regulation ==

{{Update|inaccurate=yes|date=November 2010}}
The [[Employee Retirement Income Security Act]] (ERISA) does not require 403(b) plans to be technically "qualified" plans (i.e.,&nbsp;plans governed by U.S. Tax Code 401(a)), but 403(b) plans have the same general appearance as qualified plans. While the option is available it is not known how prevalent or if any 403(b) plan has been started or amended to be ERISA-qualified. This is because the main advantage of ERISA plans for participants has been in the event of [[bankruptcy]] of the account holder, but this advantage ceased to exist after the October 2007 [[Bankruptcy Abuse Prevention and Consumer Protection Act]] extended bankruptcy protection to 403(b) plans. While they are different in some fundamental ways, qualified and unqualified plans appear almost the same to the participant and the options available are very similar. The only important differences for the participants are some additional ways that they can withdraw employer money, not salary-deferral money, before the typical 59½ age restriction, but only if the plan is funded with [[Annuity (financial contracts)|annuities]] and not [[mutual fund]]s. The federal government wants to eliminate this difference in proposed regulations expected to be finalized in 2007.{{update inline|date=February 2019}}

From a plan administration standpoint, 403(b) plans do not have many of the same technical difficulties that 401(k) plans do, such as discrimination testing, especially if the plan is not an ERISA plan. If the plan ''is'' an ERISA plan (the employer makes contributions to employee accounts) there are additional restrictions and administrative issues applicable to those employer contributions, but not if a plan of a government employer which is not subject to [[Anti-discrimination law|discrimination]] testing.

Salary-deferral contributions are not subject to discrimination testing. 403(b) plans are instead subject to universal availability which, briefly and in general, means all employees must be permitted to make salary-deferral contributions. 403(b) plans also have simpler and less costly annual reporting requirements on [[Internal Revenue Service]] (IRS) Form 5500, including not having the independent auditor requirement applicable to qualified plans with more than 100 plan participants.<ref name=":0" />