403(b) and 401k

[Guest slanq]

Can an employer have two retirement plans. We are a small non-profit that currently has a 403(b). We recently entered into an employee leasing arrangement that offers a 401k. The employee leasing company has a strict company match that is not the same as our more generous match. Can employee's still have contributions taken from their pay via the leasing company and put into the 401k while at the same time contributing the company match into the old 403(b)?

[mbozek]

While an employer can have more than one retirement plan, an employer can only provide retirement benefits for compensation earned by the employees. If the ER has transferred employees to a leasing company the employees will be paid by the leasing co. not the employer and will be eligibile for benefits from the leasing co.

[WDIK]

Question 175 of the "Who's the Employer?" column on BenefitsLink deals with staffing firms and comes to a different conculsion.