403(b) Question

Submitted by Robert Stamm on Tue, 2011-10-11 18:20

I know that you guys are the IRA specialist, but I was hoping you might be able to answer a questions about a 403(b) plan.

Is it possible to have a 403(b) plan that provides for discretionary employer contributions AND is not subject to ERISA? I’m working with a non-profit private school organization and they have been operating a 403(b) with discretionary employer contributions and they have not been doing any annual reporting. To the best of my knowledge, once employer contributions are brought into the equation, so is ERISA. They are claiming this is an ERISA-exempt plan. I want to be able to ensure they are in complaince with all rules relating to their plan.

Thanks for your help,

Bob



Submitted by Alan Spross on Tue, 2011-10-11 20:10

I believe you are correct. The following supports that view:

http://www.pozekonpension.com/pozek-on-pension/2010/02/in-search-of-the-…

In addition, the DOL has issued a number of bulletins since the new 403(b) Regs were adopted, and these include listing of what employer activities may be allowed while still maintaining non-ERISA eligibility. None of these lists include the making of any type of employer matching contributions to the plan.



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