NC 403(b) Plan
The information on this web page provides information about the 403(b) plan as it will be administered by the NC Department of State Treasurer. This web page will be updated as progress occurs with the implementation.
During the 2011 Session of the General Assembly, Session Law 2011-310 (HB 730) was passed authorizing the Department of State Treasurer to create a retirement savings option entitled the North Carolina Public School Teachers’ and Professional Educators’ Investment Plan (NC 403(b) Plan).
Questions may be directed to:
Press Release - Treasurer's Office Announces Vendor for New 403(b) Program - TIAA-CREF selected to administer new centralized plan for NC schools
National Association of Government Defined Contribution Administrators, Inc. 403(b) Glossary
March 9, 2012 NC 403(b) Town Hall - Questions and Answers
Why a North Carolina centralized 403(b) Plan?
Frequently Asked Questions
Why is the state creating a centralized 403(b) plan?
The goals of the NC 403(b) plan are to facilitate local school board compliance with regulatory agencies and maximize teacher retirement savings by reducing investment and administrative fees.
How many public school teachers and educational personnel participate in 403(b) plans in North Carolina?
Based on survey information received by the Department of State Treasurer, approximately 30,000 to 35,000 teachers and educational personnel currently contribute to a 403(b) plan in North Carolina.
How will the NC 403(b) Plan help teachers save more for retirement?
By creating a single plan to offer statewide, the Department of State Treasurer will be able to create significant economies of scale that provide lower investment and administrative fees charged to 403(b) members. These fee savings can equal thousands of dollars over the course of a teaching career.
What are the benefits of a centralized 403(b) plan?
A centralized 403(b) plan will allow educators the ability to save more for retirement due to reduced fees and will provide additional oversight that the plan is operated in compliance with all applicable regulations. Assuming the NC 403(b) plan is made available widely across the state, it will also be easier to continue contributing if you change school systems due to wider availability between school districts.
For school administrators, the NC 403(b) plan will be governed at the state level, lessening the oversight burden the addition of a 403(b) provider may cause.
What are other states doing about their 403(b) Plans?
Across the nation, many states are consolidating their 403(b) offerings to reduce fees and provide adequate oversight of the 403(b) options available to their educators. In North Carolina, the University system recently implemented a system-wide 403(b) plan to reduce the number of providers serving North Carolina universities.
Will the NC 403(b) Plan replace the current 403(b) options available In local school systems today?
No. The NC 403(b) Plan will be offered as a low-cost, centrally administered option that school districts can opt to offer alongside their current 403(b) options. The local school board responsible for governing the respective school system retains the authority to offer or eliminate any 403(b) option.
If I am a teacher and want to participate in the NC 403(b) Plan, but my school board has not approved the NC 403(b) Plan as an approved 403(b) provider, can I still participate?
No. In accordance with House Bill 730, local school boards must choose to participate in the Plan before it is made available to their employees.
Is this a push by the State to move away from the traditional pension (defined benefit) plan to defined contribution plans?
No. The NC 403(b) Plan will be offered in the same manner as the current NC 401(k) and NC 457, as an optional supplemental retirement savings plan.
When will the new NC 403(b) Plan be available?
Local school boards will be able to adopt the NC 403(b) Plan in 2013.