Guest aem2 Posted October 19, 2001 Posted October 19, 2001 A public school district is setting up a 403(B) plan for administrators. The district will be providing a matching contribution which will vest over time. After 3 years, the district's contribution will be 60% vested. After 4 years, it will be 80% invested. After 5 years, it will be 100% vested. The District was told to set up two accounts for the 403(B) contributions. The administrator's contributions would go into one account and the District's contributions would go into the other account. The District has asked whether it has to file the simplified ERISA 5500 form. I know that generally a public school district's plan would not be subject to ERISA because it would be considered a governmental plan. Does this situation change that general rule?
joel Posted October 20, 2001 Posted October 20, 2001 What about the other employees? Do they have a 403b of their own? Does it also provide for an employer match?
Carol V. Calhoun Posted October 20, 2001 Posted October 20, 2001 So long as a governmental entity is maintaining the plan, and it is only for governmental employees, it is exempt from the Form 5500 regardless of whether it contains employee salary reduction contributions, employer contributions, or both. The more important question, though, is whether there is a 403(B) plan for non-administrative employees that at least permits employee salary reduction contributions. (The plan for the other employees need not provide for the match.) If not, the plan for administrators would violate the "universal availability" rule of Code section 403(B)(12), which is the only nondiscrimination rule that still applies to state and local government plans. 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.
Guest aem2 Posted October 21, 2001 Posted October 21, 2001 The school district also has a 403(B) plan for the teachers with a matching contribution by the district after the teacher has completed so many years of service. Unlike the administrators' plan, however, the district's contribution vests immediately rather than over time. Thanks so much for the information.
joel Posted October 22, 2001 Posted October 22, 2001 Are the employees also covered by a public employee retirement system? Peace, Joel L. Frank
Guest aem2 Posted October 22, 2001 Posted October 22, 2001 Yes, they are also covered by a public employee retirement system.
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