A 403(b) plan is a tax-deferred retirement savings plan available to employees of public educational institutions and certain tax-exempt organizations. A 403(b) plan allows you to make pre-tax contributions by convenient payroll reduction and save that money for your retirement. 

403(b) plans were created to encourage long-term savings. Distributions generally are available only when you reach age 59½, leave your job, or upon death or disability. However, distributions may also be available in the event of financial hardship. Bear in mind that distributions before age 59½ might be subject to federal restrictions and a 10 percent federal tax penalty. Short-term needs can sometimes be met by nontaxable loans. This type of loan makes it possible for you to access your account without permanently reducing your balance. Though you should be aware that defaulted loan amounts will be taxed as ordinary income and might be subject to a 10 percent penalty if you are under age 59½.

Participating in your plan can provide a number of benefits, including:

• Lower taxes today– You contribute before income taxes are withheld, which means you’re taxed on a smaller amount. This can reduce your current income tax bill. For example, if your federal marginal income tax rate is 25 percent and you contribute $100 a month to a 403(b) plan, you’ve reduced your federal income taxes by roughly $25. In effect, your $100 contribution costs you only $75. The tax savings increases with the size of your 403(b) contribution.
• Tax-deferred growth and compounding interest– In a 403(b) plan, your interest and earnings accrue tax deferred. That means interest on your interest also grows tax deferred. The compounding interest can allow your account to grow more quickly than saving in a taxable account, where interest and earnings are generally taxed each year.
• You take the initiative– Contributing to a 403(b) retirement savings plan can help you take control of your future. Other sources of retirement income, including state pension plans and, if applicable, Social Security, rarely replace a person’s final salary upon retirement. That’s why it’s up to you to make sure you’ll have enough money for retirement. Contributions made to the plan are invested as you direct, based upon your elections among the investments available under the plan. Loans and distributions from the plan are subject to requirements under the plan and under the investment product that you select.

All employees are eligible to participate.

The IRS limits the annual contributions you can make to a 403(b) plan. Limits may be adjusted each year.  For 2024, you can contribute the lesser of 100 percent of your taxable income or:

• Under Age 50         $23,000* 
• Age 50 and older    $30,500*

See IRS Publication 571 for more information.

*If you are a >50% owner of another business with a defined contribution retirement plan, please notify FCPS.

You can enroll in the plan immediately upon your date of hire or any time after your date of hire, as long as you are an employee of Fairfax County Public Schools. For investment provider contacts, please view the FCPS Approved 403b Providers List.

After completing the enrollment requirements, your elective deferral contributions will begin the first day of the following month or as soon as administratively possible. Completed online enrollments must be entered by the 20th of the month to be effective on the first day of the following month. 

You may change or revoke your elective deferral contributions anytime during the plan year. Online salary reduction agreements for new enrollments, changes, or stops entered by the 20th of any given month will become effective on the 1st of the following month.  For general questions, contact the Office of Benefit Services at 571-423-3200. For additional information about participation, investment options, and more, please contact the FCPS approved investment providers directly.

EMPOWER
877-449-FCPS (3277)

CoreBridge Financial
804-897-5042