The Universal Availability Rule

[Guest Nabiyah1]

If anyone could provide some feedback and rather quickly I would really appreciate it.

I have a 403(B) plan that is excluding independent contractors, union employees, and those who work less than 500 hours per week from deferrals. There is only one plan of the employer.

Does this violate the Universal Availability Rule?

It is my understanding with a 403(B) plan that all "common law employees" must be allowed to defer to a plan of the employer.

Is it allowable to exclude these populations named above from making deferrals?

Thanks Nabiyah

[Belgarath]

I'm no 403(B) expert, so I'll defer to those in the know. First, is this a deferral only plan? If not, then they can certainly exclude different classes of individuals, subject to the normal qualified plan nondiscrimination requirements.

Assuming deferral only, they can, under 403(B)(12), exclude employees who work less than 20 hours per week. I'm not aware of any provision to allow exclusion of union employees. The independent contractors, (if they truly are) can be excluded, as they are not "employees."

Hope this helps, but I'd wait for some more informed opinions before you take mine!

[Guest Nabiyah1]

No this is not a deferral only plan. The plan also has a match; however, the plan is trying to exclude this population of employees from the employee source as well as the employer piece, this is where my problem comes in. There isn't an outside TSA or any other plan type that these individual's are allowed to defer to.

I really appreciate your feedback and anyone else that would like add that expertise on the subject.

Thanks Again,

Nabiyah