austin3515 Posted December 14, 2020 Report Share Posted December 14, 2020 The sub is NOT a wholly owned LLC. It's a for-profit corporation. What are the rules concerning whether or not they can adopt a 403(b) Plan sponsored by the parent? Austin Powers, CPA, QPA, ERPA Link to comment Share on other sites More sharing options...
Belgarath Posted December 14, 2020 Report Share Posted December 14, 2020 NYET. Unless the sub meets one of the other definitions of eligible employer. See 1.403(b)-2(b)(8)(ii) - if my magic thumbs typed the citation correctly... Luke Bailey 1 Link to comment Share on other sites More sharing options...
Peter Gulia Posted December 14, 2020 Report Share Posted December 14, 2020 https://ecfr.federalregister.gov/current/title-26/chapter-I/subchapter-A/part-1/section-1.403(b)-2 Luke Bailey 1 Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
austin3515 Posted December 14, 2020 Author Report Share Posted December 14, 2020 Eligible employer means - (A) A State, but only with respect to an employee of the State performing services for a public school; (B) A section 501(c)(3) organization with respect to any employee of the section 501(c)(3) organization; So no then, because the employees here are not employed by the 501(c)(3) org. Sounds like everyone agrees? Austin Powers, CPA, QPA, ERPA Link to comment Share on other sites More sharing options...
Peter Gulia Posted December 14, 2020 Report Share Posted December 14, 2020 Concur. A corporation other than a 501(c)(3) charity or for public schools cannot maintain a 403(b) plan, unless the corporation is an employer of a minister, and then only for the minister. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Patricia Neal Jensen Posted December 14, 2020 Report Share Posted December 14, 2020 Agree. Sub, as a for profit, cannot sponsor a 403(b). Sub should adopt a 401(k). Or the 501(c )(3) can terminate the 403(b) and adopt a 401(k) and then the Sub can also adopt the 401(k). (Not recommending the latter but it would put them both in the same plan, if that goal is important.) Patricia Neal Jensen, JD Vice President and Nonprofit Practice Leader |Future Plan, an Ascensus Company 21031 Ventura Blvd., 12th Floor Woodland Hills, CA 91364 E patricia.jensen@futureplan.com P 949-325-6727 Link to comment Share on other sites More sharing options...
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