170(b)1(A) organizations

[Guest CSTS]

I met with an investment professional working with several Conservation Districts in our state. They currently operate 403(b) plans and are considering the move to 401(k). These entities are identified as 170(b)1(A) organizations which receive government funding, but seem to fall under the category of a "public charity." I found the following information at the IRS website (http://www.irs.gov/irm/part7/irm_07-026-003.html), but it doesn't help me resolve the question of their ability to sponsor a 401(k) plan.

Has anyone had experience with this type of an entity? They were told by some type of state governing board that they were eligible to sponsor a 403(b) plan. Thanks in advance for any input or information.