New laws governing 403(b) plans now require employers to get more involved with 403(b) plan oversight.

Dan Otter, founder of the Web site www.403bwise.com, says the new rules will potentially improve the plans, but to make a difference, ultimately employers will have to select quality investments.

"My fear is they'll be lazy or scared and go with the same old, same old, which are high-fee insurance products."

457(b) plans

Individuals must start withdrawing funds by age 70½, and there's a 10-percent penalty for early withdrawals taken before you're 59½. That said, you can often avoid the early withdrawal penalty with a 457 because the fee doesn't apply to someone retiring from a governmental job, even if they're not yet 59½. Ditto if assets are tapped in the event of extreme financial hardship and unforeseen emergencies.

This year, savings limits for 457s max out at $15,500 per person or $20,500 for those over 50. However, 457 plans also come with an extra feature to help older workers save more. Under the so-called "double catch up" provision, someone within three years of retirement can stash up to $31,000 in 2007 if they've under-contributed to a 457 in the past. And if your employer offers both plans, you can fully fund both a 457 and a 403(b).

Since 2002, government workers have been allowed to roll 457 assets into an IRA, or to another workplace retirement account such as a 401(k) if that new employer plan allows it. But 457s for tax-exempt organizations can't be rolled over.