401k for 501c6 non-profits?

[Guest Hipshot]

I work in a small (3-employee) trade association which is organized as a 501c6 corporation. We currently have a SEP retirement program. I recently heard that the laws which previously forbid employees of 501c6's from establishing a 401k have been changed. Does anyone know if this is true, and if so, could you refer me to a good reference document or web page. Thanks!

[John Feldt ERPA CPC QPA]

True. You cannot have a 403(b) plan, but a 401(k) plan is good to go. This did change a while back. Before January 1, 1997, you would not have been able to adopt either a 401(k) plan nor a 403(b) plan, but after 1996, the doors were open for you for a 401(k). I think this was in the Small Business Job Protection Act of 1996.

[John Feldt ERPA CPC QPA]

Not official code/regs, but under section III:

http://library.findlaw.com/1996/Nov/1/127234.html

Also, about the 7th or so paragraph down in this artcle:

http://www.thefreelibrary.com/401(k)+plans...gain-a019224823

"Unfortunately, after the enactment of the Tax Reform Act of 1986, most associations and other private nonprofit organizations were precluded from offering 401(k) plans to employees. Only tax-exempt organizations that offered these plans before July 2, 1986, could continue to sponsor them.

Now that's all changed. After a 10-year battle by ASAE and its partners in the nonprofit community, 401(k) plans are once again available to associations, other private nonprofit organizations, and their employees. Provisions in the Small Business Job Protection Act of 1996, enacted August 20, 1996, allow associations and other nonprofit organizations to offer 401(k) plans beginning generally on or after January 1, 1997."