Hi,

This is probably a stupid question, but is there any tax benefit for working for a not-for-profit institution rather then a regular "for profit" company in industry?

I would be a permanent full time employee.

I know that they offer a Defined Contribution Pension Plan and a Voluntary Tax-Deferred Annuity Plan, which I guess is their equivalent of a 401K with match, right?

Any help is appreciated.

Thanks,
JLater

JLater:

In my opinion, there is no tax benefit for working for a non-profit organization. You still have to pay taxes as an employee.

The Defined Contribution Pension Plan you cite sounds like a 403b plan, which is better than nothing, but usually does not have as generous an employer match that 401k plans normally have.

I cannot accurately comment on the Voluntary Tax-Deferred Annuity Plan. I would have to look at the plan documents before I could intelligently comment on them.

Thanks for the info, here is the additional info that I could find:

Defined Contribution Pension Plan: Employer contributes 10 ½% of salary after 1 year of employment, subject to IRS guidelines.

Voluntary Tax-Deferred Annuity Plan: maximum annual contribution is $14,000 in 2005.

How does this compare to this plan (which is a different job I am considering):
401(k): Eligible employees (at least 18 years of age) may enroll the first of the month following one month of service. You can elect to contribute 1-25% of your salary on a pre-tax basis. The Company will match 50% of the first 7% of the employee contributions.

My expectation for these jobs is about 3-4 years.

I know these are more of finance questions, but I am happy for any additional advice.

JLater:

If I read this right, and your employer will contribute 10.5% of your salary each year (after one year of employment), that is the best deal.

The 401K requires you put up one dollar for every 50 cents the employer matches up to 7%. I cannot see how that could beat a 10.5% contribution by your employer with no requirement for you to contribute any money.

If you want to put some of your own money away, you have the tax-deferred annuity for that. Of course, all annuities are not created equal. I would have to see who runs the non-profit's annuity before I would recommend it, but you always can put money in a ROTH IRA if the annuity is not a good deal.

Thanks again, you have been very helpful.

Not a problem. That's what I.m here for.