Advantages of a 403(b) plan for your ministry


Today 403(b) plans provide significant benefits and advantages for churches, parachurch, and mission sending organizations.

Since Christian ministries have different and unique needs, it’s important to tailor any retirement plan and to be aware of the tax code and the department of labor rules. Not only to be aware but to benefit from them.

Here are some examples of some benefits you may not know about:

  • Most plan sponsors are not aware of the specific 403(b)(9) church plan rule that makes the minister’s voluntary contributions pre-SECA tax in addition to state and federal income tax.
  • The code allows missionaries working abroad to qualify for the foreign earned income exclusion, which exempts their first $102,000 of earned income from taxes.
  • A Roth 403(b) retirement plan allows missionaries abroad to contribute to a Roth 403(b) resulting in tax-free growth and distribution. A Roth 403(b) is an outstanding savings vehicle for your employees. Are you offering both a 403(b) and a Roth 403(b) plan? This is just one example.

If you’re not taking advantage of these benefits now, perhaps a change in providers is necessary.