The Nonprofit FAQ

What kinds of retirement plans can NPOs have?

Mark wrote on 8/10/95: I am looking for resources on retirement plans available to nonprofit organizations. Do you have any suggestions? Robert Steeves, President of Liberty Diversified Financial Corporation in Jersey City, New Jersey, replied: Basically, there are two types of retirement plans available to non profits. Most 501c3 organizations, and a few others like schools, have 403b plans available. These are tax deferred annuities and are qualified plans that are very similar to a 401K plan that a for-profit corporation can use. In addition, government and non profit entities have available 457 plans. These are non-qualified, unfunded plans intended mainly for top management. Having said that, our parent, a credit union, has a 457 in place that excludes only the employee with the least tenure, a seemingly bizarre way of being in compliance with IRS regs. We have experience with installing both types of plans, and would be glad to assist any NPO in understanding and/or implementing a retirement plan. A very early post. This information is probably out of date. --PB 1/21/05