Jump to content

Plan qualifying for non-ERISA, but executed an ERISA document


Recommended Posts

Just curious if you had ever encountered this. Non-Profit plan that otherwise would qualify for non-ERISA status, utilized (unintentionally, apparently) an ERISA 403(b) document. Has never filed 5500 forms. Obviously can use DFVCP program, so costs are not onerous.

I see no option. By executing an ERISA document, it seems to me that they have elected ERISA status, and they can't say it is "non-ERISA" just because they would otherwise qualify for non-ERISA status. Any other opinions?

Link to comment
Share on other sites

Belgarath, I think what you're saying is that there are no employer contributions, no employer involvement in loans, hardship determinations, or investments, i.e., no substantive authority conferred on the employer that would cause the plan to be subject to ERISA, but the document contains a provision that says the plan is governed by ERISA.  I think the plan is covered by ERISA in that case, because the 403(b) legal document adopted by the employer chooses ERISA as the governing law.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

Link to comment
Share on other sites

15 hours ago, Luke Bailey said:

Belgarath, I think what you're saying is that there are no employer contributions, no employer involvement in loans, hardship determinations, or investments, i.e., no substantive authority conferred on the employer that would cause the plan to be subject to ERISA, but the document contains a provision that says the plan is governed by ERISA.  I think the plan is covered by ERISA in that case, because the 403(b) legal document adopted by the employer chooses ERISA as the governing law.

Luke, I have a question for you about your reply.  If an employer is exempt from ERISA but adopts ERISA guidelines, does this automatically make it an ERISA group going forward?

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...