Employer contributions to a 403(b)

[Guest sparkl80]

I'm aware that as part of EGTRRA a retired employee who has an existing 403(b) plan may receive contributions to the plan for up to five years after retirement. These post-retirement employer contributions are made using the ex-employee's unused sick leave or vacation pay. Would these contributions be considered true "employer contributions" for the purpose of qualifying the plan as subject to ERISA? My understanding is that a true non-ERISA plan is funded solely through salary deferrals; and it would seem to follow that unused vacation pay or sick leave would have been defined during the employee's tenure as a benefit, not as part of salary. Any insights would be greatly appreciated. Thx.

[Guest mikewebb68]

Correct, such post-retirement contributions are employer contributions that would ERISAfy a 403(b) plan, unless it is a church or government (e.g. public school) plan. Church plans are not subject to ERISA unless they elect coverage, and public schools are never subject to ERISA.

[Guest Mpowers]

Correct..contributions can be made as an employer contribution for up top five years after separation from employment...the same sick pay distributions can be used to pay for post retirement healthcare costs tax free.

Mark Powers

PRG

203-453-3151