tailieunhanh - Lecture Employee benefits and retirement planning - Chapter 25: Tax deferred annuities

This chapter covers tax deferred annuities (TDAs), or Internal Revenue Code Section 403(b) plans. The chapter begins by identifying the type of employer that can implement such a plan-essentially tax-exempt organizations (per Section 501(c)(3)) and public educational organizations. | What is it? Tax deferred employee retirement plan that can only be adopted by certain - tax exempt organizations - public school systems Benefits - contribution not taxed currently - account balances accumulate tax-free - defer tax on contributions and earnings Copyright 2009, The National Underwriter Company When is it indicated? 1. Eligible employer - tax exempt organization - public school or college 2. employer wants low-cost tax deferred retirement plan Copyright 2009, The National Underwriter Company When is it indicated? 3. employees - want choice regarding level of savings - are young with time to retirement - willing to accept some investment risk 4. employer wants “savings-type” supplement to defined benefit or other qualified plan Copyright 2009, The National Underwriter Company When is it indicated? 5. Other considerations - non-governmental, tax-exempt employers can also offer Sec 401(k) plans - tax-exempt employers and governmental entities can maintain SIMPLE IRA plan Copyright 2009, The National Underwriter Company What is a tax-exempt organization? Meets qualifications of IRC Code Sec. 501(c)(3) organized and operated exclusively for religious, charitable, scientific, testing for public safely, literary, or educational purposes, or to foster national or international amateur sport competition or for the prevention of cruelty to children or animals must benefit public, not individual or private shareholder refrain from political campaigning or propaganda intended to influence legislation Copyright 2009, The National Underwriter Company What is an educational organization? An educational organization has a regular faculty and curriculum regularly enrolled student body in attendance that is operated by a state or municipal agency Can also adopt a TDA plan for certain employees outside of the schools who perform services involving the operation or direction of the public school education program Copyright 2009, The National . | What is it? Tax deferred employee retirement plan that can only be adopted by certain - tax exempt organizations - public school systems Benefits - contribution not taxed currently - account balances accumulate tax-free - defer tax on contributions and earnings Copyright 2009, The National Underwriter Company When is it indicated? 1. Eligible employer - tax exempt organization - public school or college 2. employer wants low-cost tax deferred retirement plan Copyright 2009, The National Underwriter Company When is it indicated? 3. employees - want choice regarding level of savings - are young with time to retirement - willing to accept some investment risk 4. employer wants “savings-type” supplement to defined benefit or other qualified plan Copyright 2009, The National Underwriter Company When is it indicated? 5. Other considerations - non-governmental, tax-exempt employers can also offer Sec 401(k) plans - tax-exempt employers and governmental entities can maintain .