Erisa Rules For 403b In Massachusetts
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Limit on employee elective salary deferrals The limit on elective salary deferrals - the most an employee can contribute to a 403(b) account out of salary - is $23,000 in 2024, ($22,500 in 2023; $20,500 in 2022; $19,500 in 2021 and 2020).
ERISA restricts certain actions related to how benefit plans are designed and administered. For example, it limits the types of investments that retirement plans can make, imposes fiduciary duties on plan administrators, and mandates specific reporting and disclosure requirements.
403(b) plans sponsored by 501(c)(3) organizations (such as tax-exempt hospitals and charitable organizations) are generally subject to ERISA but may choose non-ERISA if they meet specific requirements. In other words, they do not automatically qualify to be non-ERISA.
The Massachusetts 403(b) Supplemental Retirement Plan (the 403(b) plan) gives you the opportunity to supplement your core retirement benefits under the State Employees' Retirement System (MSERS) or the Optional Retirement Program (ORP) with this voluntary benefit.
Plan sponsors with pre-approved plans are required to restate their entire plans onto that pre-approved plan document within a two-year period currently scheduled to open on January 1, 2025, and close on December 31, 2026. This window does not apply to individually designed plans.
The Massachusetts 403(b) Supplemental Retirement Plan (the 403(b) plan) gives you the opportunity to supplement your core retirement benefits under the State Employees' Retirement System (MSERS) or the Optional Retirement Program (ORP) with this voluntary benefit.
403(b) plans and 401(k) plans are very similar but with one key difference: whom they're offered to. While 401(k) plans are primarily offered to employees in for-profit companies, 403(b) plans are offered to not-for-profit organizations and government employees.
Under ERISA, each fund is subject to additional requirements and obligations once more than 25 percent of the fund's assets under management (AUM) are subject to ERISA (the 25 percent threshold).
Cons for employees ERISA preempts state laws, limiting the ability of employees to seek remedies through state law. ERISA requirements may not go far enough to protect employees' interests, as employers have some discretion in designing benefit plans.
