Requirements for Non-ERISA 403(b)

[Guest Joe Vasko]

Is a Non-ERISA 403(b) required to draft a legal plan document and SPD since there are not testing requirements or IRS/DOL filings?

thanks, joe

[QDROphile]

Whose plan document would you want it to be? Unless ERISA does not apply because the employer is a government or governmental instrumentality, the employer would not want to get involved with any documentation.

[Mike Preston]

QDROphile, can you repeat that in slightly different terms? I can read what you wrote 3 ways and I'm wondering which one you meant.

[QDROphile]

A nongovernmental organization may allow allow employees to participate in 403(b) arrangments and remain exempt from ERISA. It facilitates the arrangment by sending pay deferrals to one or more 403(b) providers. If the employer gets involved in documentation beyond its limited role as a conduit for deferrals from pay, it increases the risk that the arrangment will be subject to ERISA.

A governmental employer's 403(b) plan is exempt from ERISA because of the exemption for governmental plans. ERISA does not apply and the Internal Revenue Code does not require a plan document in order to provide the tax benefits of a 403(b) arrangement. However, state law may require the government plan sponsor to have a written document and a written disclosure document that might be similar to an SPD.

No comment on the wisdom of not having adequate documentation and disclosure.

[Mike Preston]

Thanks.