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Chuch plan covering only full time employees?


Guest Bob Lees
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Guest Bob Lees

We have a church that has approximately 20 people on payroll. There are 4 full time (3 salaried, 1 hourly), the remaining work under a variety of part time arrangements (salaried and hourly). We don't track hours for salaried part time and hours for the hourly vary from a few hours a week to 30+. Can we have a 403(B) plan to cover only the 4 full time with employee and employer contributions? How do we do this in a adoption agreement? Are we considered a nonelectiving church plan? Do we have to offer all employees the right to make employee contributions even if we don't plan on making any employer contributions to them? Do we have discrimination issues to worry about? Do we need to file a 5500?

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Guest Danny Miller

Church 403(B) plans maintained by a "steeple" (as opposed to a church hospital or university)are not subject to the nondiscrimination requirements imposed on 403(B) nonelective and salary reduction contributions. Thus, you can contribute in behalf of your full-time workers only, and you do not need to give all workers the opportunity to make salary reduction contributions. You would need to fill out your adoption agreement in a manner that makes it clear you only want to contribute in behalf of full-time workers. Church plans are also exempt from filing IRS Form 5500.

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Danny Miller

Conner & Winters

1050 17th St., N.W.

Suite 810

Washington, D.C. 20036

(202) 783-5711

dmiller@cwlaw.com

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