I think it has to do with the exempt status. People who are exempt (i.e., they can be fired at will, at any time, without reason) have the option of choosing a 403(b) plan, which is the nonprofit organization’s equivalent of a 401(k). At the time I started with GDU, various advisors suggested that a plan that gives you control over your investments was somehow better than a defined pension plan.

If I’m understanding the legal mumbo-jumbo associated with the AZ state pension plan, apparently (! take this with a grain of salt) the state has an agreement with the feds that opts it out of the rule that says state government employees are exempt from Social Security. State of Arizona employees pay FICA and Medicare, whether they’re in the state pension plan or the 403(b).

We also had the option of joining the 457(b) deferred compensation plan, which acts like a 401(k) or 403(b) without an employer match, but it isn’t an either/or set-up. I’m contributing to both, which means I’m saving 10% towards retirement (I’m planning to increase it as I get out of debt).

It’s the either/or that confuses me, but at least you got a higher paycheck out of the deal. Granted, I don’t know how Louisiana universities have their retirement set-up since I have never worked at one at a higher level than a student job. It may be just like Arizona. *Shrug*

Good luck with the job hunt. You’ve had enough problems at GDU to justify moving to a different setting of employment.