Answer Compliance and Administration Considerations
By the end of this section you will be able to educate and assist Plan Sponsors with the various requirements to keep their plan compliant
403(b): Universal Availability & Compliance Traps
Employers offering 403(b) plans are subject to IRS Universal Availability rules, meaning they must offer the plan to all eligible employees and provide annual written notification. Failure to comply risks IRS penalties and plan disqualification.
You can add value by:
- Helping employers stay compliant
- Identifying gaps in employee communication
- Offering materials and workshops to meet notification requirements
Learn more:
IRS 403(b) Universal Availability Compliance Requirements Flyer
Plan Administration Guide
Cat No. 104634
403(b)(9) Planning Considerations
When working with clergy or church staff:
- Ensure they understand the housing allowance tax exclusion and how to properly elect and document it.
- Educate them on how 403(b)(9) income in retirement may still qualify for the housing exclusion — even if paid as annuity income.
- Reinforce the importance of recordkeeping and coordination with their tax preparer or accountant.
This unique blend of tax strategies, faith-based values, and financial security is a powerful conversation starter and trust-builder in these communities.
457(b): Greater Flexibility, Fewer Universal Rules
457(b) plans do not require universal availability, allowing employers to restrict access to certain employee groups or job classes. However, public governmental 457(b) plans must be formally funded, with assets held in a trust for participant benefit. This protects participant savings and helps ensure plan integrity.
Special Use Case: FICA Alternative (3121) Plans
FICA Alternative Plans (§3121) are used by school districts and local governments to provide retirement benefits to part-time, seasonal, and temporary (PST) employees in lieu of Social Security.
These plans benefit:
Employers:
by avoiding the 6.2% Social Security match
Employees:
by replacing after-tax FICA deductions with 7.5% pre-tax contributions
If the employer is eligible, this structure helps financial professionals introduce additional retirement plans in new settings and serve a broader range of employees — especially valuable in high-turnover or seasonal roles.
Additional Tools & Resources are available on the Agent Portal.
To go there directly:
Don’t know who to contact?
Send an email to the team at RetirementServices1@NationalLife.com
or call 866-243-7174
Source: IRS 2025
* This hypothetical example is used for illustrative purposes only. Actual results will vary.
** Please ensure you follow state and National Life Group rules regarding client testimonials and how/where they may be used.
- The index strategies of fixed indexed annuities credit interest based in part on the change in a market index such as this one. Indexed annuities do not directly participate in any stock or equity investments. When discussing this or other index strategies with your client, explain that this is not an investment in the market and that this is a method for crediting interest and disclose any cap, participation rate or threshold that will apply. For an Index with volatility control and the additional costs deducted from the Index value, the positive Index value change may be less than that of similar indices that do not include volatility control and do not deduct these costs. When included in a fixed indexed annuity with the protection of a 0% or 1% floor, the benefit of reduced downside will not be realized for index returns below 0% or 1%. Indexed annuities do not directly participate in any stock or equity investments. This is not a solicitation of any specific annuity contract. Guarantees are dependent upon the claims-paying ability of the issuing company. Assuming no withdrawals made during the surrender charge period and no rider charges.
- Guaranteed Lifetime Income Riders (GLIRs) are only available to purchase on Life Insurance Company of the Southwest (LSW) fixed indexed annuities. Riders are an optional benefit for which premium is charged, are available at issue only, and may not be available in all states.
Registered Representatives and Investment Adviser Representatives of, and securities and investment advisory services are offered solely by Equity Services, Inc., Member FINRA/SIPC. Equity Services, Inc. is a Broker/Dealer and Registered Investment Adviser affiliate of National Life Insurance Company (NLIC). National Life Group® (NLG) is a trade name of NLIC, Montpelier VT, Life Insurance Company of the Southwest (LSW), Addison TX and its affiliates. Each company is solely responsible for its own financial condition and contractual obligations. LSW is not an authorized insurer in NY and does not conduct insurance business in NY. In CO, MO, NH and WI, Equity Services, Inc. operates as Vermont Equity Services, Inc
The companies of National Life Group® and their representatives do not offer tax or legal advice. Please encourage your clients to seek tax or legal advice from their appropriate professional advisor.
FOR AGENT USE ONLY – NOT FOR USE WITH THE PUBLIC
TC8049010(0625)3 | Cat No 108134(0625)