A 403(b)(7) plan is a tax-deferred retirement plan often available to employees of public schools or non-profit organizations. After carefully considering the effects of the Internal Revenue Service (IRS) regulatory changes regarding 403(b)(7) accounts, Janus Henderson made the difficult decision to no longer participate as a vendor for 403(b)(7) plans after Dec. 31, 2008.
Effective Jan. 1, 2009, Janus Henderson no longer accepts salary reduction contributions, rollover contributions or transfers of assets into 403(b)(7) plan accounts. For information about your existing Janus Henderson 403(b)(7) account, call a Janus Henderson Representative at 800.525.1093.
Tax features and investments
What are the tax features?
Effective Jan. 1, 2009, Janus Henderson no longer accepts salary reduction contributions, rollover contributions or transfers of assets into 403(b)(7) plan accounts. However, contributions made to the 403(b)(7) account are typically pre-tax and grow tax-deferred until the time of distribution.
The tax benefits of a 403(b)(7) typically come into play when money is withdrawn. Your investment earnings will be taxed at your ordinary tax rate during the year money is withdrawn with the idea that your tax rate will be lower at that time when you may no longer be working.
How much can I invest?
Effective Jan. 1, 2009, Janus Henderson no longer accepts salary reduction contributions, rollover contributions or transfers of assets into 403(b)(7) plan accounts. For information about your existing Janus Henderson 403(b)(7) account, call a Janus Henderson Representative at 800.525.1093.
What happens if I invest too much?
Effective Jan. 1, 2009, Janus Henderson no longer accepts salary reduction contributions, rollover contributions or transfers of assets in 403(b)(7) plan accounts. For information about your existing Janus Henderson 403(b)(7) account, call a Janus Henderson Representative at 800.525.1093.
What are the fees for a 403(b)(7) account?
There is no cost to open an account and no annual maintenance fees when account minimum thresholds are met.
Withdrawals and helpful information
How do I request an account withdrawal?
A 403(b)(7) plan withdrawal requires a triggering event such as separation or retirement from service.
You may request a withdrawal by completing our 403(b)(7) Plan Distribution Form. In some cases, this may require documentation from your previous employer. The form also includes a special tax notice that provides you with information about your options and tax consequences of taking a withdrawal. Please contact a Janus Henderson Representative at 800.525.1093 to obtain this form or answer any questions related to your 403(b)(7) account.
Am I required to take money out of my account?
Generally, yes. You must begin to receive distributions from your 403(b)(7) by April 1 of the year that follows the later of:
- The calendar year in which you reach age 73, or
- The calendar year in which you retire from employment with the employer maintaining the plan
This is called a Required Minimum Distribution (RMD).
Failing to take your RMD could trigger a 25% (or 10% if corrected in a timely manner) excess accumulation penalty from the IRS on the amount of RMD not distributed.
What other information might be helpful to know?
A unique feature of the 403(b)(7) account is the age at which you can start taking distributions without penalties. For many retirement plans, penalty free distributions can start to occur once the individual reaches age 59½. However, with the 403(b)(7) plan, if you retire from service at the age of 55 or older, you can start to make withdrawals without penalty. This feature could be helpful if you need to tap the assets before age 59½.
The Janus Henderson 403(b)(7) Account Disclosure Statement & Custodial Agreement provides complete details about 403(b)(7) accounts at Janus Henderson.
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Contact a Janus Henderson Representative
Our Janus Henderson Representatives will answer your questions and assist you through the movement of assets process. We are available at 800.525.3713 weekdays 9 a.m. to 6 p.m. EST.