Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

The participating employee is typically considered the owner of a 403(b) tax-sheltered annuity because this type of plan is designed primarily for the benefit of employees, particularly those working in educational and certain non-profit organizations. The employees contribute to the annuity and have control over their accounts, including decisions related to investments within the plan.

In a 403(b) plan, the employer may facilitate the plan and provide access to various investment options, but the individual employee is the one who owns their contributions and retirement funds. This structure empowers employees to manage their retirement savings actively, making them the rightful owners of the tax-sheltered annuity.

Understanding this ownership aspect is crucial for grasping how 403(b) plans function compared to other retirement plans, such as 401(k)s, where employees also retain ownership of their accounts.