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Church 401(k) Plan

Guest CRA

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I have been researching church plans and whether or not they can adopt a 401(k) Plan. It would seem they can (i.e. testing issues, reporting requirements and document submission, etc.). The client would like to see something in writing that specifically says a church plan can adopt a 401(k). Any suggestions?

Additionally, I have not been able to find the definition of non-electing church plan (have looked up the code sections, but am missing something).

Any suggestions are greatly appreciated!

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Guest Danny Miller

Code section 401(k)(4)(B)(i) states that tax exempt organizations, other than state and local governments, can maintain cafeteria plans.

As to your non-electing church plan question, Code section 410(d) is the basis upon which a church plan can make an election to be covered by the "regular" qulaified plan rules. A church plan which has not made such an election is referred to as a non-electing church plan, so the term is somewhat defined in the negative.

Hope this helps.

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