Because TDRA 403(b)/Roth 403(b) participants can choose beneficiaries to receive the funds, the TDRA 403(b)/Roth 403(b) may be used as an estate planning tool to leave an inheritance. Another potential benefit includes easy, pain-free contributions. Employers may make contributions to the pre-tax TDRA 403(b) in addition to salary, and participants may make contributions through salary reduction to both the TDRA 403(b) and the Roth 403(b).
What are the potential drawbacks of the TDRA 403(b)/Roth 403(b)?
Like many retirement products, the TDRA 403(b)/Roth 403(b) requires that funds stay in the account until retirement. There are some exceptions to this rule, however, such as separating from employment, becoming disabled or encountering an eligible financial hardship (such as medical expenses, funeral expenses and natural disasters).
Also, similar to other products, the TDRA 403(b)/Roth 403(b) is subject to Required Minimum Distributions (RMDs) after a member turns age 72, unless he or she hasn’t retired from qualified employment.
Additionally, those close to retirement may want to consider that there is a required five-year waiting period before participants are allowed to take a distribution. This option is not ideal for those who are less than five years away from retirement (or when one wishes to withdraw funds).
Am I eligible to participate in the TDRA 403(b)/Roth 403(b)?
If you’re employed by an organization affiliated with the Stone-Campbell (Restoration) Movement, you’re eligible to participate in the TDRA 403(b)/Roth 403(b). These organizations include, but are not limited to, congregations, wider ministries, seminaries, and universities and colleges associated with the Christian Church (Disciples of Christ), Christian Churches/Churches of Christ, or Churches of Christ in the United States. A minister who is self-employed can also become a participant in the TDRA 403(b)/Roth 403(b) as long as ministerial services are being performed for compensation.
How do I get started?
In a participation agreement between your employer and Pension Fund, your employer will define eligibility requirements for participation of itself and its employees in the TDRA 403(b)/Roth 403(b). You or a representative of your employer can contact Pension Fund directly to set up a participation agreement at 866.495.7322 (PFCC) or pfcc1@pensionfund.org.