The 403(b) is a tax deferred retirement plan available to employees of educational institutions and certain non-profit organizations as determined by section 501(c)(3) of the Internal Revenue Code. Contributions and investment earnings in a 403(b) grow tax deferred until withdrawal (assumed to be retirement), at which time they are taxed as ordinary income.
The 403(b) was established in 1958 by the federal government to encourage employees in certain tax-exempt organizations to establish retirement savings programs. The name refers to the relevant section in the Internal Revenue Code.
IRS.gov: FAQs Regarding 403(b) Plans
IRS.gov: 403(b) Plan Checklist
Journal of Accountancy: Understand how new 403(b) plan requirements compare to 401(k)s
The Nonprofit Times: Your 403b Plan