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non-erisa vs erisa and emloyer (church) contributions


Guest Ted in PA
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Guest Ted in PA

I have read from several sources that if a non-profit org makes employer contributions into a 403-b they would have to an ERISA plan, rather than non-ERISA.

However, my question is whether a 501c-3 church can make employer contributions to only selected employees, in the

403-b plan, and still be non-ERISA, rather than needing to be ERISA controlled?

Any IRC or DOL ruling would be appreciated, as well. Thank you

Ted in PA

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A church plan, as defined in ERISA Section 3(33) is not subject to Title I of ERISA.

A church plan is a plan established/maintained by a church or a convention or association of churches (and it is exempt from tax under Code Section 501). A church plan definition includes some fairly specific requirements for identifying church employees and for identifying any employees under an unrelated business. Sometimes church-controlled organizations might be able to qualify for the church exemption. See ERISA sections 3(33) and 4(b)(2).

If a church or convention or association of churches that maintains any church plan makes an election under Code Section 410(d), then various Code requirements, including participation, vesting, and funding requirements, would apply. Such an election, if made, is irrevocable.

Church plans are generally exempt from ERISA unless an election is made to have ERISA apply. That election cannot be revoked.

Now, would a church ever elect to have ERISA apply, and why? - that may be an interesting discussion.

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