The following information is intended to provide OSURA members with general information about 403(b) and 457(b) Supplemental Retirement Accounts. It is not intended to be, nor should it be taken as, investment advice. It is provided as a high level summary of the plans and provides links to user friendly web-sites which describe and discuss various topics related to 403(b) and 457(b) plans. The web-site content is written for the population at large and may differ from the administration of plans at the University due to its governmental status.

403(b) Supplemental Retirement Accounts

• General Information Source
  The 403(b)wise.com website is a comprehensive and balanced website on this topic. It was founded in 2000 by a group of teachers in California that felt more of their education colleagues should have balanced information about the 403(b) plan and how it works. As an individual account holder, you will find most information of interest on the "for Participants" tab on the front page. The following items provide information of particular interest to participants from that section:
• General Information about 403(b) Plans: This section provides eight topics pertaining to understanding various facets of a 403(b) plan.
• 403(b) Basics: As a tax sheltered supplemental retirement instrument, one should know about 403(b) tax sheltered annuity accounts, and 403(b) (7) custodial accounts. 403(b) annuity accounts have an insurance component to them, and typically higher fees. The 403(b) (7) custodial account does not have this insurance feature and typically has lower fees. This section explains the difference between the two kinds of 403(b) accounts, among other topics.
• 403(b) Products: Traditional 403(b) plans can offer several kinds of annuities and mutual funds. The 403(b)(7) plan typically offers mainly mutual funds.
• Fees and the Cost to Invest in a 403(b) Plan: The effect of compounding fees in a 403(b) account can have a dramatic effect on the long term financial outcome. This section has a graph which shows the effect of fees on three hypothetical accounts accumulated under the same investment conditions, but with different fees: Average Variable Annuity, Average Managed Mutual Fund, and Average Index Fund. The differences in outcome can be dramatic.
• 403(b) Must Reads: Here are some real world perspectives on the strengths and weaknesses of 403(b) tax-deferred investments, as discussed by the 403bwise website.
• Ohio State 403(b) Vendors
  Ohio State 403(b) vendors of Supplemental Retirement Accounts and their contact information can be found here.

457(b) Supplemental Retirement Accounts

• General Information Source
  The 403bwise website also provides equivalent information on 457(b) Deferred Compensation Plans. It offers comprehensive and balanced information on 457(b) plans. As an individual account holder, you will find most information of interest on the "for Participants" tab on the front page. The following items provide information of particular interest to participants from that section.
  • General Information about 457(b) Plans: This section provides eight topics pertaining to understanding various facets of a 457(b) plan.
• 457(b) Basics: The 457(b) tax deferred supplemental retirement instrument comes from a different part of the IRS code, and is separate from other kinds of plans. This section explains how it is different from a pension plan or 401K plan.
• 457(b) Products: 457(b) plans can offer several kinds of annuities and mutual funds. They typically offer mostly mutual funds.
• Fees and the Cost to Invest in a 457(b) Plan: The effect of compounding fees in a 457(b) account can have a dramatic impact on the long term financial outcome. This section has a graph which shows the impact of fees on three hypothetical accounts accumulated under the same investment conditions, but with different fees: Average Variable Annuity, Average Managed Mutual Fund, and Average Index Fund. The differences in outcome can be dramatic.
• Ohio State 457(b) Vendors
  Ohio State 457(b) Supplemental Retirement Account vendors and their contact information can be found here.

Additional Resources: Supplemental Retirement Accounts

• OSURA Newsletter Articles
  This section provides direct links to articles on the Ohio State 4S03(b) and 457(b) plans published in the OSURA Newsletter.
  • Be Wise, Check out www.403bwise.com: This article introduces the 403bwise website and discusses some implications of fee structures. January 2011.
  • Introducing What You Need to Know About the Ohio State 403(b) Plan: This article introduces the OSURA 403(b)/457(b) Working Group and describes some of their activities. November 2010.
• Interesting Articles & Resources
  This section provides links to a selected number of reports and news articles that provide additional information on 403(b) and 457(b) plans.
  • TIAA/CREF Issues & Trends 403(b) Report #98: This incisive report examines the 403(b) fee structures in four test states: Arizona, California, Iowa and Texas. The study compares and contrasts "open access" vendor states of California and Texas with "controlled access" vendor states of Iowa and Arizona, and finds a considerable difference in 403(b) vendor fees between these two kinds of states. California is an "open access" vendor state similar to the plan at Ohio State. Figure 2 on p. 13 shows a significant spread of 403(b) fees between the “open access” and “controlled access” states, which should be instructive to the reader. The full 18 page report can be downloaded as a PDF file from this link. November 2010.