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Non-ERISA plan and Rollover Contributions

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A 501(c)(3) org. has a non-ERISA deferral-only plan and meets the DOL safe harbor rules. If the plan/investment arrangement permits rollover contributions will the plan be subject to ERISA?

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No.  When determining whether or not a 403(b) arrangement is subject to ERISA, you look at the level of 'Employer Involvement' in the contract.  For instance, if the Employer make a contribution to the contract, then it would be subject to ERISA because there's clear 'employer involvement'.  A participant deciding to roll funds into the account doesn't reflect any employer involvement; and, therefore, does not subject the plan to ERISA.

Good Luck!

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But, assuming those premises, and considering the possibility that the payer might be an ERISA-governed plan, be careful to discern that it really is a rollover contribution of the amount received in an eligible rollover distribution, rather than a transfer or an exchange.

A distribution can extinguish the rights and attributes of the payer plan; a transfer or an exchange might not.

 

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I seem to recall that in FAB 2007-02, consistent with Peter's point, the DOL opined that the employer could not "authorize" plan-to-plan transfers while remaining within the safe harbor. So an actual "Rollover" as ETA says, ought to be permissible as long as the 403(b) plan administrator isn't exercising any discretionary authority as to whether or not to accept the rollover.

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