Regular pre-tax 403(b) contributions are not subject to the federal income tax for the year that you make the contribution.  When the contributions are distributed from the 403(b) Plan, such as upon retirement, the contributions and all accumulated gains are subject to the federal income tax.  Therefore, making pre-tax 403(b) contributions enable participants to defer taxes until a distribution is taken. 

After-tax 403(b) contributions are subject to the federal income tax for the year that the contributions are made.  When the contributions are distributed from the 403(b) Plan, the contributions are not subject to the federal income tax a second time, but any accumulated gain that is distributed will be subject to the federal income tax.

Roth 403(b) contributions are subject to the federal income tax for the year in which the contribution is made.  When Roth contributions are distributed from the 403(b) Plan, the Roth contributions and all accumulated gains are not subject to the federal income tax if you have a "qualified distribution".  Making Roth 403(b) contributions enables participants to avoid taxes, not merely defer taxes.  However, participants need to meet certain requirements in order to avoid taxation.

In order for a distribution to be a "qualified distribution", a participant must participate in the Roth feature for at least five (5) years, and the distribution must be made after the participant:

• Reached age 59 1/2
• Suffers a disability (under IRS standards, which may not be identical to the standard benefits under the University's long-term disability plan)
• Dies

Please review the University of Pittsburgh 403(b) Plan and 401(a) Retirement Plan Summary Plan Description for additional provisions and information regarding the Roth 403(b) feature. 

Please also consider consulting with a personal financial planner, tax advisor, or a TIAA-CREF representative to determine if the Roth 403(b) feature is right for you.