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Dual Status, Government and 501(c)(3), pre-ERISA 403(b) plan


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A county government has dual status. Their "403(b)" was in place prior to ERISA. They provide matching contributions, but claim the 403(b) plan is a non-ERISA plan. Is there a grandfather rule that would allow a 403(b) to be non-ERISA even if employer contributions occur? Would it have to be established before ERISA was enacted?

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Yes, they are public institutions that are 403(b) eligible employers due to their 501(c)(3) status.  They have to meet certain requirements to enjoy this dual status.  They must not be an integral part of the government, and must not have significant enforcement, regulatory authority.

PensionPro, CPC, TGPC

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Rev. Rul. 69-545, 1969-2 C.B. 117, is the ruling that permits a municipal hospital to have 501(c)(3) status.  If it does, it can have a 403(b) plan.  However, that doesn't mean it loses its governmental status.  And as a governmental plan, it is not subject to ERISA.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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