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February 15, 2009

Safe Harbor 403(b) Plan

Your Guide

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Definition

Nongovermental 403(b) plans that make contributions in accordance with a safe-harbor formula, resulting in the plan not being subject to the ACP nondiscrimination testing. Contributions may be made under one of the following formulas:

1. A basic matching formula,

2. An enhanced matching formula, or

3. A nonelective contribution formula

Referring Cite

IRC § 403(b)(12)(A), IRS notice 89-23,

Additional Helpful Information

Contributions to safe-harbor 403(b) plans are immediately 100% vested

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Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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