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Texas Payroll/Personnel Resource

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Deferred Compensation Plans
403(b) Deferred Compensation Plans

A 403(b) plan also allows for contributions to be taken before taxes are calculated as prescribed in Section 403(b) of the Internal Revenue Code of 1954 as it existed on Jan. 1, 1981.

This type of deferred compensation is available only to employees of certain education institutions, including:

  • The Texas Higher Education Coordinating Board.
  • The Texas Education Agency.
  • The Texas School for the Deaf.
  • The Texas School for the Blind and Visually Impaired.
  • The Texas Juvenile Justice Department and the facilities and institutions under its jurisdiction.
  • Each state-supported institution of higher education.

Sources

Internal Revenue Code, Sections 401(a)(13)(A), (k); 72(p), 402(g)(1), (5); 457(a)-(e), (g); Texas Government Code, Sections 609.001(1)-(2), (5), (8), (10), (11), 609.007(b)-(c), 609.502(a)-(c); Texas Revised Civil Statutes, Article 6228a-5, Sections 1, 2(b); 34 Texas Administrative Code Section 87.5(a).