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403(b) and 457(b) Plans

Retirement plans for nonprofits and local governments

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What Are 403(b) and 457(b) Plans?

403(b) and 457(b) plans allow employees of public and private entities, those designated as nonprofits, and local governments, to save for retirement.

What Are the Benefits?

Easy plan management

Wide range of no-load mutual funds available

Participant disclosure assistance to help meet Department of Labor requirements [for 403(b) ERISA plans]

What Type of Employer Can Open This Plan?

• Public and private schools, churches and other nonprofit entities that are considered tax-exempt under Section 501(c)(3) of the IRS tax code can open a 403(b) plan.
• State and local governments can open a 457(b).

Who Contributes to the Plan?

• Employers

Plan document outlines if employer contributions are allowed.

• Employees

If Roth IRAs are available based on the plan’s provisions, employees would be able to make after-tax Roth or pretax contributions up to $22,500.¹

Those age 50+ can make an additional $7,500* in catch-up contributions if the plan allows.

Additional catch-up contributions may be allowed if the plan allows them.

What Investment Options Are Available?

You choose which funds are available for you and your employees from a variety of mutual funds. Or consider a pre-diversified portfolio built by our professionals. It's a convenient way to choose based on when you'll need the money or the risk level that fits your goal. And it takes the guesswork out of picking investments.

What Are the Other Plan Benefits?

  • Convenient services based on how you want to work with us, including online access to track investments and make changes.

Things to Know Before You Get Started

  • Approve employee transactions

  • Distribute applicable employee notices and disclosures

  • Waived if participant's investments total $10,000 or more

  • $15 annual custodial fee per fund for less than $10,000

  • Waived for ERISA plans

403(b) and 457(b) Plans
With American Century Investments

Product and services to fit the needs of you and your employees, plus the ability to invest in others.

Get Support and Guidance

Education and tools—plus guidance upon request—can help you and any employees plan for retirement. It starts with helping you choose the right plan.

Find Investment Opportunities

You and your employees can build a diversified portfolio that aligns with your risk comfort level, time horizon and retirement goals.

Make an Impact

When you invest with us, you can also invest in the future of others. Together we can become a powerful force for good.

Establish a 403(b) or 457(b) Plan

Speak with our team of experienced professionals dedicated to servicing you and your participants. Call 1-800-345-3533.

Sign up for Plan Sponsor Access [PDF] for convenient management. Contact us at 1-800-345-3533 to get a username and password.

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Questions?

Call to speak to a Business & Retirement Specialist who can help you select a plan for your business.

Limits listed are for 2023. The IRS sets limits annually.

Contributions may only be based on the first $305,000 compensation, as adjusted. The overall limit on annual contributions is $61,000 (403(b) only) or 100% of gross compensation, whichever is less. Additional catch-up contributions may also be available as outlined in the plan document. Limits listed are for 2022. The IRS sets limits annually.

Additional Plan Administrator responsibilities apply.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Diversification does not assure a profit nor does it protect against loss of principal.

IRA investment earnings are not taxed. Depending on the type of IRA and certain other factors, these earnings, as well as the original contributions, may be taxed at your ordinary income tax rate upon withdrawal. A 10% penalty may be imposed for early withdrawal before age 59½.

Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.

Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.