403(b) and 457(b) Plans

Horace Mann has been helping educators plan for retirement since Congress extended 403(b) tax-deferred annuities to public education institutions in 1961.  As a company Founded by Educators for Educators®, we believe in giving administrators the resources to meet their employee’s needs and help them achieve financial well-being for a lifetime. 

While most educators receive a pension from their state teachers’ retirement system after they retire, the money from a pension typically does not match their pre-retirement salaries.  Providing a 403(b) or 457(b) plan to your employees can help them supplement their retirement income.

What is the Difference Between a 403(b) and a 457(b) Plan?

A 403(b) plan is generally available to employees of educational institutions.  A 457(b) plan is generally available to governmental employees.  The Internal Revenue Code allows funds for both types of plans to be invested in annuities and mutual fund custodial accounts.  In addition, tax laws allow educators to use both 403(b) and 457(b) plans to prepare for their futures!

As the employer, you provide the plan to your employees.  If you already have an established 403(b) plan, a 457(b) can help your employees increase the amount they are putting aside for retirement.    

Why Offer a 403(b) or 457(b) Plan?

  • Contributions payroll reduced before taxes, thus lowering employees’ current income tax
  • Higher contribution limits than Individual Retirement Arrangements (IRAs)
  • Opportunity for employees to accumulate more for retirement tax-deferred
  • Income taxes deferred until withdrawal at retirement, when employees may be in a lower tax bracket
  • Variety of distribution options
  • Disciplined savings through regular payroll reduction
  • No reduction to Social Security benefits

How Horace Mann Can Help

Horace Mann offers a wide range of products for any 403(b) or 457(b) plan you establish, giving your employees an additional opportunity to maximize their savings toward retirement and the flexibility to meet their individual investment needs and risk tolerance.  To learn more, contact your local Horace Mann representative.

Note: Horace Mann’s 457(b) annuity product is not available in Oregon.

Annuities should be considered long-term investments. If money is taken out early, there could be an additional 10 percent federal income tax. In addition, withdrawals on tax-qualified contracts may be restricted by the IRS or the employer’s plan.  A tax advisor should be consulted regarding the purchase of any tax-favored products.  While an annuity is not required in order to obtain tax deferral within a 403(b), 457(b) or other tax-qualified retirement plan, an annuity offers additional benefits.  In order to offer these benefits there are additional charges and fees in the annuity.

Horace Mann annuity products are underwritten by Horace Mann Life Insurance Company.  Horace Mann Investors, Inc., member FINRA, offers mutual funds through authorized third party vendors.  Horace Mann Investors, Inc. is located at 1 Horace Mann Plaza, Springfield, IL  62715.  Your Horace Mann representative can provide prospectus ordering information for the mutual funds.   

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