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solomon@reliant.org

Why the change?

We are so thankful for the overwhleming response to last week's survey. Our employees are either 1) really excited about this change or 2) really excited about a chance to win the Lego Christmas ornament book and $100 Amazon gift card. Whatever the motivation was, we received a lot of good feedback! We're going to take the next few weeks to help unpack some FAQs about this change in more detail.

The most frequent response we received from our survey was that employees were tuned in and listening and either excited or curious to know more.  The top 5 questions we received are listed below with answers. We're also going to host a Zoom webinar on the evening of September 20th at 7:00PM that will be co-hosted by Reliant's retirement plan broker, Michael Clark and Reliant's Director of Finance teams, Barb Seckler. Michael is a licensed financial advisor that helps us manage our retrirement plan. He's been serving Reliant for close to 15 years and has been an important counselor to us as we've carefully researched this decision to transfer to the 403(b)(9) plan. Save the date on your calendar and join us (we'll send a Zoom link in next week's email) for a great evening of information and all attendees will receive an additional entry into our prize drawings.

Top 5 questions asked in our recent survey. 

(Didn't get a chance to fill out our survey yet - it's still open. Heres' the link: https://a.co/d/dPxD54k)

Will our current 401k be transferred to the new 403(b)(9) automatically?

Yes, Reliant will be working with Principal to transfer our employees' existing 401(k) balances into the 403(b)(9) plan. No action is needed by employees.  

Will my investment options change?

No, the investment options will remain the same.

Why the change from a 401(k) to a 403(b)(9)?
  1. Historically, 403(b) plans have been the retirement plan option that the majority of non-profits offer. When selecting our existing 401(k) plan years ago, Reliant wanted to offer a retirement plan that was more "main-stream" for employees - so we selected a 401(k). At that time, Reliant also wanted some features that were only available in a 401(k) plan. Times have changed! In most cases, today's 403(b) plans are widely used and understood in the retirement planning world. Many large hospitals and universities have 403(b) retirement plans. Also, changes in legislation for retirement plans have made the the reasons we previously preferred the 401(k) plan to a 403(b) plan obsolete. The two types of plans have become extremely similar yet 403(b) plans now offer a few additional features that are advantageous to non-profits such as Reliant. The 403(b)(9) plan is a type of 403(b) plan specifically set-up for churches and religious non-profits with a parsonage withdrawal distribution option "built-in" to the plan. That option will make parsonage distributions easier for retiring Commissioned and Ordained Ministers.  Our next answer (below) explains some of the "pros" to this plan that we are excited about.  
What are the pros and cons of a 403(b)(9)?

One "pro" of a 403(b) plan is that it isn't subject to some compliance rules that 401(k) plans have. What this "pro" means for Reliant is that we can customize our plan for different program teams based on the unique needs of those groups of employees. For example, we're varying eligibility rules and the employer contribution for Fixed Term employees in residency programs vs our more traditional "career" employees. This flexibility will allow those different types of employes to have a retirement plan that is customized for them, rather than being forced into a "one size fits all" plan like our previous 401(k), due to the compliance rules associated with it. Another "pro" is the built-in parsonage withdrawal option (mentioned in Answer 3 above). One "con" of a 403(b) is certain types of investments are restricted from being offered within a 403(b).  We researched our current investment options with our retirment plan broker, Michael Clark, and he felt confidant the offerings we currently have and any future investment options that we'd want will still be available under the 403(b)(9). Another con is sometimes 403(b) plans have higher fees but, we have been assured our fees with Principal won't be affected by this change.    

Will anything change for part-time employees' eligibility?

No, there is no change to part-time employees' eligibility. Part-time employees will be eligible for the 403(b)(9) plan the same as they are for the 401(k) plan. 

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