Erisa Rules For 403b In Fairfax
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403(b) plans that are subject to ERISA must comply with DOL regulations, which may include obtaining an employee identification number (EIN) for the plan. Governmental, non-electing church and other 403(b) plans that meet the safe-harbor requirements under the DOL regulations are not subject to ERISA.
All 403(b) plans are subject to Title I of ERISA unless an exemption applies.
Five-year post severance contributions are employer contributions made to a 403(b) plan after the employee's severance from employment. In general, post severance contributions must meet the following: Employer contributions may be made for an employee for up to 5 years after the employee's employment ends.
In that case, the account must be depleted by December 31 of the year that includes the 5th anniversary of the account owner's death. Account owner dies on or after required beginning date then the entity may use a life expectancy calculation based on the remaining life expectancy of the decedent.
However, not all retirement plans are covered by ERISA. For example, Federal, state, or local government plans and some church plans are not covered.
All 403(b) plans are subject to Title I of ERISA unless an exemption applies.
403(b) plans sponsored by church plans and governmental plans are exempt from ERISA, but may elect ERISA coverage if they want it.
This universal availability rule means that if one employee is permitted to make 403(b) elective deferrals (including designated Roth contributions, if allowed by the plan), the employer must extend this option to all its employees.
Government and public education 403(b) plans are exempt from ERISA. 403(b) plans sponsored by 501(c)(3) organizations (such as tax-exempt hospitals and charitable organizations) are generally subject to ERISA but may choose non-ERISA if they meet specific requirements.
A 403(b) plan must generally allow all employees to make elective deferrals to the plan. Under the universal availability rule, if an employer permits one employee to defer salary by contributing it to a 403(b) plan, the employer must extend this offer to all employees of the organization.
