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Church Plan


Guest Pension Girl
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Guest Pension Girl

If a non electing church employer adopts a 401k plan, certain IRC provisions do apply. However it appears that in terms of coverage, IRC 410(b) does not apply. However the pre ERISA coverage rules apply. I am not sure I understand this - pre ERISA coverage under 401(a)(3) a prior code section states that 80% or more of the eligible employees must be covered.

Can 410(b) rules be applied in lieu of the above?

Also, I assume any plan document would be an individually designed plan since church employers cannot adopt a prototype?

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I did not find much guidance on the pre-ERISA coverage rules, maybe another poster can help with that.

As for the prototype, a nonelecting church plan document has no reliance unless it submits the plan to the IRS, thus the plan is individually drafted in that sense.

However, the word "prototype" does not necessarily mean "a document with an IRS opinion letter". Some practitioners have created "prototype" documents for church plan use or for government plan use. Those "protoypes" try to make it convenient to select which provisions of the plan will apply or not apply, but none of those prototypes carry the reliance of the familiar IRS-approved prototypes that we see for many 401(k), profit sharing, and defined benefit plans.

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