Supplementary Retirement Plans
Supplementary retirement plans, typically defined by the IRS as 403(b) or 457 plans, are intended to provide additional income on top of a pension or other kind of retirement plan. They operate as defined contribution plans for savings beyond what you would receive from your primary benefit. They are voluntary by nature, and can provide flexibility for you to increase or decrease their retirement savings depending on personal choices and family situations.
Contributions into these kinds of retirement plans are always separate from contributions into a primary retirement plan, such as a pension plan.
These kinds of supplemental retirement plans are typically provided by a third-party, private-sector financial firm that is authorized by your state or school district, but isn’t formally part of the teacher retirement system. You may have met a financial advisor at your school offering to sign you up for one of these voluntary programs.
Some states—such as Connecticut, Michigan, Texas, Virginia, and others—also offer supplemental retirement savings through their teacher retirement system by allowing employees to contribute money (up to the maximum IRS levels) in a state-managed defined contribution program.