tax exempt organizations & 401(k) Plans

[Guest Robert Lees]

I'm trying to determine what is a tax exempt organization for 401(k) plan purposes. I only see them generalize the tax exempt organization. What is considered a tax exempt organization under pension simplification? I know that a 501©(3) can adopt a 401(k) Plan. Can a 501©(4) sponsor a 401(k) Plan?

[davef]

Code Sec. 401(k)(4)(B)(i) says that "any organization exempt from tax under this subtitle..." can maintain a plan with a cash or deferred arrangement. The term "this subtitle" refers to Subtitle A (Income Taxes) of the Internal Revenue Code. Since sec. 501 is under Subtitle A, a 501©(4) organization would be eligible for a 401(k) plan.

For other discussions on tax-exempt organizations, see IRS Notice 92-36 (relating to the delayed effective date for the nondiscrimination regs) and IRS Notice 96-64.