Typically, school districts (I assume this is your wife's employer) don't have the wherewithall to hire independent third party administrators, nor do they know very much about asset allocations, how to determine all plan expenses or comply with reporting and contribution requirements. The insurance industry has 'risen' to fill this need, by providing the educational districts with compliant plans, do the mandatory annual reports, make distributions, etc, etc., and typically fund this through a bevy of fees and expenses to the employees, not the employer. One lucrative method of expensing employees is through the use of deferred annuities, with the associated subaccount fees and M&E charges, which together may run 200 - 300 basis points. And then the Mutual Funds offered are often of the expensive proprietary variety, further increasing fees.

Most 403(b) plans are funded only with employee salary deferrals, and so don't have an employer match. So if the school district offers the arrangement as I've described, your wife may be better served to forego 403(b) contributions, and simply make deductible TIRA contributions and then after tax contributions to a mutual fund or brokerage account, using no-load index funds, exchange traded funds or easiest of all, a target retirement fund. Do your own calculations, but I'd reason that what she saves in fees and expenses over her remaining working years will more than offset the current tax advantages of making pretax contributions and tax deferred growth in a 403(b) plan as you've described.

BruceM