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403(b) for religious school--church-controlled org?

Guest Penelope

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Guest Penelope

I am reviewing the 403(b) plans for two religious schools--one a Jewish high school, the other a Catholic elementary/secondary school. The Catholic school is not operated by a parish or archdiocese, nor by a religious order, but the head of the school is a sister. There is daily religious observation and instruction. The school is listed in the official Catholic Directory.

The Jewish school is not affiliated with any temple or synagogue, but it has daily morning prayers and instruction in Hebrew and Torah, observes the laws of kashrut, is headed by a rabbi and has several rabbis on its board. To be admitted, a student must be Jewish (as defined by principles of reform Judaism).

Each plan is administered by a committee appointed by the board of directors of the respective schools. I am fairly certain that both plans would be "church plans" for purposes of ERISA and Code section 414(e) as the schools are "associated" with a church or association of churches.


Are these plans subject to the ACP and other discrimination requirements of 403(b)? I am having a hard time figuring out it they are qualified church-controlled organizations--it appears that the standard for this is narrower than for "association" with a church. Would these plans be retirement income accounts under 403(b)(9) or custodial accounts under 403(b) (7)? Does it matter for any reason other than investment options? Any advice about useful research sources would be greatly appreciated.

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