Plans for 1 employee

[Guest Jan Reynolds]

I am looking for any information on options available to 501©3 regarding benefit plans especially 403b plans. We are an oversight organization with only two employees and one is contracted through a religious order therefore is not considered an employee. I have spent two years speaking with brokers with regard to options for plans - the employer does not have contributing funds and so it will be only funded by employee deductions. Both Vanguard and Fidelity require employer contributions. Any options?

[QDROphile]

As long as you have only one employee, you might be able to make a SIMPLE work if the employee wishes to defer forever at least the amount of the employer's two percent contribution. The two percent would be covered by a pay cut, but watch out for other undesired consequences of a pay cut. For example, most people view the reduced FICA wages as a good thing (and the tax savings can help mitgate the pay cut), but if you believe in Social Security, reduced contributions might be viewed as bad. One might argue that the deal would be an impermissble CODA. You decide.

[K2retire]

Many companies also offer 401(k) plans for a single person employer.