Can Employees in Canada Benefit from a 403(b) Plan?

Q: We are a denominational church that sponsors a 403(b) plan. We have an increasing number of employees who are Canadian citizens who live and work in Canada. Could we sponsor a 403(b) plan for such employees?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: The tax deferral advantages of 403(b) plan for U.S. Citizens would not apply to Canadian citizens working in Canada. Therefore, you would not want to provide a 403(b) plan to these employees. Typically, churches provide after-tax retirement arrangements. However, there are retirement plans that can be provided to Canadian employees working in Canada that offer tax advantages under Canadian law.

One such plan is a registered retirement savings plan, known as an RRSP, which is similar to an American individual retirement account, or IRA, under U.S. federal law. You should contact a Canadian attorney with retirement plan expertise to discuss options for your Canadian employees.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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