Church has several part-time employees who work over 1000 hours a year; can they be excluded under 403(b)?

[Guest Casey58]

Church Group wants to set up a plan to allow for employee deferrals plus "match" 3% to all eligible employees. We first suggested a Safe Harbor 401(k) arrangement using the 3% non-elective, but I now might suggest a 403(b). The problem is that the Church has several parttime employees that work over 1000 hours a year and they want to specifically exclude all of these parttime employees (although the deferral piece would be open to all employees). Can a 403(b) plan make these kind of exclusions? Any recomendations on 403b prototype documents?

[Guest jfp]

If the employer is a "church" within the meaning of Section 3121(w)(3) of the Internal Revenue Code, and if the plan is a "church plan" within the meaning of Section 3(33) of Title I of ERISA, none of the minimum coverage, eligiblity or nondiscrimination requirements of the Code or ERISA will apply to the plan.

[mbozek]

A 403(b) church plan is exempt from all of the nondiscriminaion requirements of the IRC including the requirement to provide universal availability of salary reduction. IRC 403(b)(1)(D). There are no IRS approved prototype documents since 403(b) plans do not recieve a determination letter from the IRS but the 403(b) vendors usually have a model or sample document which should be reviewed by counsel before adoption.