403(b) vs. 457(b) for Pasco County public employees

A Pasco County public employee can fund a 403(b) and a 457(b) in the same year, because the IRS gives the two plans separate contribution limits rather than one shared limit. The two plans are not identical once the money is inside them, though: the early withdrawal rules attached to a 403(b) and a governmental 457(b) are different, and moving money from one to the other does not carry the friendlier rule along with it. This article is not tax, legal, or investment advice, and nothing here replaces a conversation with a Florida-licensed planner or CPA about your own accounts.

Public employees in this corridor participate in the Florida Retirement System as the mandatory primary retirement plan. The 403(b) and 457(b) plans covered here sit on top of FRS, as voluntary accounts an employee elects to fund. The plan specifics below come from Pasco County Schools’ own published plan document, so an employee of a different Pasco public employer should confirm their own plan’s terms rather than assume they match. This article does not cover how FRS itself works, including DROP or the Investment Plan versus Pension Plan election; both are covered in dedicated guides linked further down.

What is the difference between a 403(b) vs. 457(b) for a Pasco County public employee?

The real difference is not the investment menu, it’s how the IRS treats each plan for contribution-limit purposes and how each plan treats an early withdrawal. Both are voluntary accounts layered on top of a Pasco County public employee’s FRS pension or Investment Plan account. In Pasco County Schools, both are administered by the same third-party administrator, TSA Consulting Group, Inc. (TSACG), and both offer a Roth version alongside the standard pre-tax version. The next two sections cover the contribution-limit rule and the withdrawal-penalty rule, since those are what actually change how a household uses the two accounts.

Can you contribute to both a 403(b) and a 457(b) in the same year?

Yes. The IRS gives a 403(b) and a governmental 457(b) separate annual deferral limits, so contributions to one do not reduce how much can go into the other. The IRS states it directly: “You have a separate deferral limit if you’re also eligible to participate in a 457(b) plan,” and the 457(b) limit is not combined with deferrals made to a 403(b).

The Florida Retirement System’s own employer handbook states the same rule, in the section explaining how contribution limits are tracked for FRS Investment Plan members who also participate in plans like a 403(b) or a 457(b). Its January 2026 edition reads: “For 402(g) eligible contribution calculations, 401(k) and 403(b) contributions are combined, whereas 457(b) contributions are counted separately.” A footnote explains why: “Prior to EGTRRA, employees who contributed to both a 457 and a 403(b)/401(k) plan were limited to a combined maximum contribution for all plans. Since January 1, 2002, 457(b) plan participants are no longer required to aggregate their 457 contributions with contributions they make to 403(b)/401(k) plans.” Finding a Florida source that states this plainly matters, because the rule changed more than two decades ago and older guidance still describes the combined limit.

For 2026, the IRS limits are:

• Employee elective deferral limit for 401(k), 403(b), governmental 457(b), and the federal Thrift Savings Plan: $24,500, up from $23,500 for 2025.
• Age-50-and-over catch-up: $8,000 for 2026, up from $7,500 for 2025.
• Special SECURE 2.0 catch-up for ages 60 through 63: $11,250 for 2026.

Read the last two lines carefully, because they are alternatives rather than a stack. The IRS describes the ages 60 through 63 figure as applying “instead of the $8,000 noted above,” so an employee in that age band uses the higher number in place of the age-50 amount, not on top of it.

Because the 403(b) and 457(b) deferral limits are separate, the deferral limit and the applicable catch-up apply to each plan on its own rather than to the two combined. That is the 402(g) rule specifically. Other limits still exist, and the handbook notes that 403(b) and 457(b) contributions “are not included in the 415 limit calculations, but are monitored for different IRC limitations.” What a household can actually put into each plan depends on income, budget, and the contribution elections filed with TSACG, which runs a maximum allowable contribution calculation.

Why is there no 10% early withdrawal penalty on a governmental 457(b)?

A governmental 457(b) plan is not defined by the IRS as a qualified retirement plan, and that classification is why an early distribution from it escapes the 10% additional tax that applies to early withdrawals from a 403(b), a 401(k), or an IRA. IRS Topic no. 558 states it directly: “In general, an eligible state or local government section 457 deferred compensation plan isn’t a qualified retirement plan and any distribution from such plan isn’t subject to the 10% additional tax on early distributions.” The next section covers the exception to that rule.

Does rolling a 403(b) into a 457(b) make that money penalty free?

No, and this is the point in the 403(b) vs. 457(b) comparison where an employee is most likely to get an unpleasant surprise. IRS Topic no. 558 continues past the general rule above with a specific carve-out: “However, any distribution attributable to amounts the section 457 plan received in a direct transfer or rollover from one of the qualified retirement plans listed above would be subject to the 10% additional tax.” A 403(b) is one of those plans.

In practice, moving a 403(b) balance into a 457(b), whether through a rollover at a job change (the same mechanics covered in what to do with an old 401k after a job change) or a direct transfer, does not convert that money into penalty-free 457(b) money. The dollars keep the withdrawal treatment they had in the plan they came from. One 457(b) account can hold two pools with two different rules: original 457(b) contributions, penalty-free on early distribution, and rolled-in 403(b) or 401(k) money, still subject to the 10% penalty until that plan’s own ages or events are met. Keeping track of which dollars are which is the plan administrator’s job, and it is worth asking how they are accounted for before a distribution rather than after.

A related point that is easy to misread: Pasco County Schools’ plan document also describes exchanges, which are a different transaction entirely. An exchange moves an account between investment providers authorized under the same plan, and the notice limits those to “one 457(b) plan to another 457(b) plan, or from one 403(b) plan to another 403(b) plan.” That rule is about switching providers, not about whether a rollover between the two plan types is allowed.

Anyone who has rolled money between these accounts should confirm with TSACG or a Florida-licensed planner which dollars carry which withdrawal treatment before assuming an early distribution is penalty-free. A planner working through retirement income planning or a 401k rollover is used to tracing a mixed-source account.

What does Pasco County Schools actually offer, and who is eligible?

Pasco County Schools offers both a 403(b) and a 457(b) directly, administered by the same outside company. The district’s own Meaningful Notice / Plan Summary Information states: “Plan administration services for the 403(b) and 457(b) plans are provided by TSA Consulting Group, Inc. (TSACG).” Most employees are eligible immediately: “Most employees are eligible to participate in the 403(b) and 457(b) plans immediately upon employment, however, private contractors, appointed/elected trustees, school board members, and student workers are not eligible to participate in these Plans.”

Eligible employees are not limited to one plan or the other. The notice confirms: “Eligible employees may make voluntary elective deferrals to both the 403(b) and 457(b) plans and participants are fully vested in their contributions and earnings at all times.” There is also no annual open-enrollment window to work around, at least by default. An SRA form, or a deferred compensation enrollment form for the 457(b), is what starts, stops, or changes a contribution, and the notice says that “unless otherwise notified by your employer, you may enroll and/or make changes to your current contributions anytime throughout the year.” That qualifier is the district’s own, so confirm your current instructions rather than assuming the door is always open. Active employees manage this at sra.tsacg.com, or by calling TSACG at 1-888-796-3786.

One honesty point: the notice posted at pasco.k12.fl.us is the 2021 edition, and its dollar figures, a $19,500 basic deferral limit and a $6,500 age-50 catch-up, are 2021 numbers. The plan rules still apply. The dollar limits do not. Current-year limits come from the IRS, listed above.

What is the 15-year catch-up, and why does only the 403(b) have it?

A 403(b) account, and only a 403(b) account, can offer an additional catch-up tied to long service rather than age. Pasco County Schools’ plan document describes it as allowing “additional contributions of up to $3,000 to the 403(b) account if, as of the preceding calendar year, the participant has completed 15 or more full years of employment with the current employer, not averaged over $5,000 per year in annual contributions, and has not utilized catch-up contributions in excess of the aggregate of $15,000.” All three conditions have to be met at once.

This catch-up does not exist on the 457(b) side. The 457(b) has its own special catch-up available in the three years before normal retirement age, but the IRS describes it as “only allowed if not using age 50 or over catch-up contributions,” meaning a participant chooses between the two, not both. Pasco County Schools’ posted notice lists the age-based catch-up and the 403(b) 15-year catch-up, but not this 457(b) three-year catch-up. Confirm directly with TSACG whether a plan offers it, rather than assuming it does.

How do these fit alongside an FRS pension or Investment Plan?

FRS is the mandatory primary retirement plan for Pasco County public employees, and the 403(b) and 457(b) plans covered here are voluntary accounts layered on top of it, not a substitute for it. Every FRS member, regardless of plan or class, contributes 3.00% of gross compensation to FRS. Whether an employee is in the FRS Pension Plan or the Investment Plan changes what that primary benefit looks like at retirement; that election, plus DROP for Pension Plan members, is covered in two dedicated guides rather than repeated here: FRS Investment Plan vs. Pension Plan for Pasco County employees and the FRS DROP program explained for Pasco County employees.

Which plan sponsor covers you?

Not every 403(b) or 457(b) available to a Florida public employee is the same plan. A Pasco County Schools employee’s 403(b) and 457(b) are the district’s own plans, administered by TSA Consulting Group. The State of Florida Deferred Compensation Plan is different: a 457(b) administered by the Florida Department of Financial Services through its Bureau of Deferred Compensation, for State of Florida government employees, reached at 877-299-8002.

Those two plans are not interchangeable, and an article or coworker describing “the Florida deferred comp plan” may mean either one. Confirm which entity sponsors your plan before assuming an article about one describes your account.

Frequently asked questions

Can a Pasco County employee contribute to both the 403(b) and the 457(b) at once, and reach the full IRS limit in each?

Yes. Because the IRS treats 403(b) and governmental 457(b) deferrals as two independent limits, an eligible employee can direct deferrals up to the applicable annual limit into each account in the same year, subject to budget and TSACG’s paperwork. That is specifically the 402(g) elective deferral rule. It does not mean no other limit applies, so the maximum allowable contribution calculation TSACG runs is still the number to work from.

When can a Pasco County Schools employee take a distribution from their 403(b) without a penalty?

The district’s plan document states a participant “may not take a distribution of 403(b) plan accumulations without penalty unless they have attained age 59½ or separated from service in the year in which they turn 55 or older.” Those are the two paths described in the plan document. Taking money out before meeting either condition exposes the withdrawal to the 10% penalty.

When can money come out of a 457(b) without a penalty?

The plan document states that, generally, a distribution cannot be made from a 457(b) account until the participant has a severance from employment or reaches age 70½. A governmental 457(b) distribution isn’t subject to the 10% additional tax, except for any portion of the balance that arrived through a rollover from a 403(b), 401(k), or similar qualified plan, which keeps its original penalty treatment.

Is the State of Florida Deferred Compensation Plan the same plan as the Pasco County Schools 457(b)?

No. The Pasco County Schools 457(b) is the district’s own plan, administered by TSA Consulting Group. The State of Florida Deferred Compensation Plan is a separate 457(b), administered by the Florida Department of Financial Services through its Bureau of Deferred Compensation, reached at 877-299-8002. Confirm which entity sponsors your plan before relying on information written about the other one.

Do the current-year IRS limits match what’s printed in Pasco County Schools’ posted plan notice?

Not currently. The notice posted at pasco.k12.fl.us is the 2021 edition, and its dollar limits are 2021 figures. The plan rules it describes still apply, but those specific dollar limits should not be treated as current. The IRS publishes current-year limits directly, listed earlier in this guide.

Getting matched with a planner who knows Florida public employee plans

Coordinating a 403(b), a 457(b), and an FRS pension or Investment Plan account is a multi-account decision, and getting the contribution split or withdrawal order wrong can be expensive to unwind. If you’d like to be matched with an independent, licensed financial planner in the Wesley Chapel corridor who works with Pasco County public employees regularly, call Wesley Chapel Wealth Pro at (813) 680-3195. We’re a free matching service, we don’t manage money or give investment, tax, or legal advice ourselves, and the planner you’re matched with handles every recommendation from there. FRS pension elections and 403(b) coordination drive a lot of the planning demand we route out of Temple Terrace. For the tax picture a large 403(b) or 457(b) balance eventually creates, see tax planning coordination and required minimum distributions explained for Pasco retirees.