Opinions June 17, 2008

(b)lines Ask the Expert: ERISA or non-ERISA Plan?

June 17, 2008 ((b)lines) - A 403(b) plan adviser asks: "If a small 501(c)(3) organization serves as a conduit for its employees to contribute to a 403(b), is it considered to be a non-ERISA plan? Also, if it is non-ERISA, does it have to have a plan document and does it have to file a Form 5500?"

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A 403(b) plan of a 501(c)(3) organization which is not a church plan or governmental plan may only be exempt from ERISA if it meets the narrow requirements for certain salary-reduction-only plans under Department of Labor Regulations. See the recent Department of Labor Field Assistance Bulletin 2007-2. Whether or not a plan meets that test is a facts and circumstances determination.

If the plan does qualify for the safe harbor, it would not be subject to ERISA and does not have to file 5500s, but under the final 403(b) Treasury regulations, even non-ERISA plans have to have written plan document or documents.

– David Powell, Groom Law Group, Chartered

This feature is to provide general information only, does not constitute legal advice as part of an attorney-client relationship, and cannot be used or substituted for legal or tax advice.