• Businesses have 401(k) plans and pensions to offer their employees a way to save for retirement. For nonprofit companies and organizations, the tax laws are somewhat different, though rarely does the employee notice a difference in how it affect his or her savings plan. The main difference between retirement plans for nonprofit organizations is the type of organization that it is offering it, whether it be a nonprofit healthcare provider, educational institution, association, foundation or government agency.
  
  

401(a)

• Much like the similar sounding 401(k) plan used by for-profit companies, a 401(a) retirement plan allows employees to make tax-deferred contributions to their retirement accounts. Employers may also contribute to the plan in the employee's name or they may offer a matching contribution. Employee contributions may be either required or voluntary. You may also participate in a 457(b) plan as well as a 401(a).
  
  

403(b)

• A 403(b) is much like a 401(k) that is used primarily by educational organizations and 501(c)(3) organizations. Employees make tax-deferred contributions to a retirement account that are taxed when they are withdrawn at retirement. The money is invested in one of the investment options offered by the employer, who may or may not offer a matching contribution. It is portable and can be rolled into an IRA if you leave the company offering the plan.
  
  

457(b)

• A 457b is another plan that functions like a 401(k) and is used by state and local governments (including police, fire and public school personnel) and non-government tax-exempt organizations (like hospitals, unions and charities). However, the non-government groups have to limit their participants to management or highly-compensated employees. Employees are allowed to make tax-deferred contributions into investments offered by their employers. It is portable and can be rolled into an IRA if you leave the company offering the plan. The 457(b) plan has a catch-up provision called the "final three year" provision for employees nearing retirement who haven't contributed the maximum amount in prior years. It allows employees to contribute above the normal limits in the final three years before reaching retirement age.