403b plans - moving from a 403b to an appropriate plan.

[Guest Mike Moore]

How do you transition a city government that has a 403b plan into the appropriate plan, one that allows employee only pre-tax contributions. Also, what would be the appropriate plan to transition into.

[Everett Moreland]

My memory is the IRS has expanded its 403(B) amnesty program, in RP 2001-17, to deal with nonqualifying employers that have adopted a 403(B) plan. You might confirm that and consider submitting the 403(B) plan under that program.

The appropriate plan is a 457 plan.

[GBurns]

What is wrong with an employee contribution only 403(B) plan?

What makes a 457 the appropriate plan?

[Carol V. Calhoun]

A 403(B) plan can be maintained only by a 501©(3) organization or a public school or university. A city government is not any of these.