NTSA Summit: 403(b), the ‘Essential’ Plan

The 403(b) has an importance beyond what most imagine, panelists in a June 29 session of the 2021 NTSA Summit reminded attendees.

“To know where we are is to know where we have been,” said Bob Architect, who from 1975 to 2009 served as senior tax law specialist with the Employee Plans Division of the IRS and whose specialty was 403(b)s since 1978. 

Ellie Lowder of TSA Training and Consulting Services offered an historical perspective, noting that Oct. 4, 1957 was a pivotal date: the date on which the Soviet Union launched Sputnik 1, the first artificial satellite successfully placed in orbit around the earth. Part of the U.S. government’s answer, Lowder said, was to add Section 403(b) to the Internal Revenue Code to help support the educational community in order to help boost the U.S. space program. 

But the importance of the 403(b) went beyond even space. “403(b) was essential,” Architect asserted. “It gave us the ability to conceptualize what a salary reduction agreement was. We learned so much about other plans through understanding 403(b).” Added Teresa Ward, Senior Director of Retirement Programs at Invesco, “We created something that was greater than the sum of the parts.’ And, she suggested, the impact continues. “We always learn something that is actionable,” she said.

“The 403(b) has become a tremendous way” to save, said Architect, “almost on the level of Section 401(a) of the Internal Revenue Code.”