What Is a 403(b) Plan?

A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations, and certain ministers.

Individual accounts in a 403(b) plan can be any of the following types.

• An annuity contract, which is a contract provided through an insurance company.

• A custodial account, which is an account invested in mutual funds or a group trust.

• A retirement income account set up for church employees. Generally, retirement income accounts can invest in annuities, mutual funds, or other investments.

We use the term “403(b) account” to refer to any one of these funding arrangements throughout this publication, unless otherwise specified.