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K-12 403(b) Isn’t Just for Teachers πŸ‘©πŸ½β€πŸ’ΌπŸ‘¨πŸ»β€πŸ’Ό

September 5, 2019

As a former teacher I have admittedly been maniacally focused on how important the 403(b) is for teachers. And it is. It’s a wise way to supplement pension savings. But the plan is not just for teachers. By design it is open to virtually all K-12 school employees. This includes bus drivers, custodians, maintenance crew, office personnel and countless others. Those working less than 20 hours a week can be denied ability to contribute but this is generally rare. 

The Wealthy Custodian

I was recently reminded again that the 403(b) is not just for teacher by our most popular podcast guest and longtime FO4 (Friend of 403bwise), custodian Jeff York. In conversations before, during, and after our latest podcast interview Jeff pointed this out. I have dubbed Jeff “The Wealthy Custodian.” And not just because he has accumulated an impressive nest egg on a very modest salary. It’s also because of his greater good world view and efforts to help educate others about saving for retirement.

Low Participation

When I was teaching in Montgomery County Public Schools — just outside of Washington, D.C. — one of the benefits officials shared with me a spreadsheet listing 403(b) participation by job title and school site. Nationally, K-12 teacher participation is only about 2 in 5. The data I saw on that spreadsheet was even worse for non teachers.  

What makes low non-teacher participation even more troubling is that support personnel aren’t always eligible for pension plans. One of the most heart wrenching 403(b) conversations I have ever had was with a school secretary after a presentation I did in Connecticut in the early 2000s. She was almost in tears when she shared that she had worked at her current school for more than 10 years, wasn’t eligible for the state pension, and had never been told about the 403(b). Today, all employees must be annually notified of their eligibility. This is known as Universal Availability. Still, we know that few schools provide unbiased education to their teachers. How many are providing it to support personnel?

Important Equity Issue

This is an equity issue and we will continue to call attention to it. If you are a teacher or administrator, please share this and other 403(b) resources with those key support personnel. They deserve to be just as 403(b) wise as teachers.