Understanding Government Retirement Plans
A Side-by-Side Comparison
When it comes to retirement planning for public sector employees, navigating the different plan types can be confusing. Government workers often have access to specialized plans—like 401(a), 403(b), and 457(b)—each with their own rules, benefits, and limitations. Whether you’re an HR professional designing benefits or an employee evaluating your options, this chart breaks down the key differences to help you make informed decisions. Download a PDF of this chart here.
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401(a)
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403(b)
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457(b)
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Who It’s For
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Governmental entities, educational institutions, and non-profit organizations
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Non-profit organizations, including schools and churches
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State and local government organizations (e.g., teachers, firefighters)
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Plan Type
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Defined contribution
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Tax-deferred retirement savings
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Deferred compensation plan
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Contributions
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Employer determines method (mandatory/voluntary)
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Employee elective deferrals; employer may match
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Employee elective deferrals; employer may match
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Contribution Limits 2026
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Up to $72,000 (combined employer + employee)
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$24,500 + $8,000 catch-up
(age 50+) |
$24,500 + $8,000 catch-up (age 50+); up to $35,750 with special catch-up
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Vesting
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Immediate for employee contributions; employer sets vesting schedule for employer contributions
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Typically immediate for employee contributions, however employers can set a vesting schedule
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Immediate vesting on all contributions
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Tax Treatment
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Tax-deferred
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Tax-deferred or Roth
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Tax-deferred or Roth
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Early Withdrawal Penalty
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10% penalty before age 59½ (unless exception applies)
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10% penalty before age 59½
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No penalty for early withdrawal before age 59½
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Why Fisher\SMB Is the Right Partner for Your Retirement Plan Strategy
Navigating government retirement plans can be complex—but it doesn’t have to be. Fisher\SMB specializes in helping public sector organizations design and manage retirement benefits that attract top talent and support long-term financial wellness. From plan setup to employee education, we’re here to simplify the process and maximize impact.
Need help navigating your retirement plan options
Our retirement specialists are here to guide you through your options and help design a strategy that fits your organization’s unique needs.
Learn More About
Non-Profit Retirement Plans
Compare 401(k) vs. 403(b)
Compare 401(k) vs. 403(b) plans and find the right retirement plan for your business or nonprofit. Understand key differences of both.
Learn about different 403(b) solutions
There are two main types of 403(b) solutions: annuity-based or non-annuity-based. Learn the difference and why it matters.
A 403(b) plan for their now, later and after
Choose a retirement plan designed specifically for non-profits like schools, hospitals, charities, and churches. Visit our 403(b) page to learn more.