Fourteen years ago, we recommended that the legislature and governor take action to fix the inequity in New Jersey’s Gross Income Tax Act that treats contributions to §403(b) retirement plans less favorable than contributions to §401(k) retirement plans. Section 403(b) plans are common among nonprofit and certain governmental employers because they are not necessarily governed by ERISA and, thus, are normally easier and less costly to administer.

We repeat our recommendation today in view of changes in the manner in which retirement plans are now regulated and the continuing inequity.