ERISA 403(b) to non-ERISA 403(b)

[Guest evenstar38]

I have a client that currently sponsors an ERISA 403(b) with an employer match and one investment provider. If they decide to eliminate the matching contributions to the plan prospectively, can they now be considered a non-ERISA 403(b)? If so, would they need to restate their current document (a volume submitter doc) to a non-ERISA 403(b) document?

Any advice or information would be much appreciated!

ETA: Will also want to allow for multiple investment providers going forward.

[mbozek]

I have a client that currently sponsors an ERISA 403(b) with an employer match and one investment provider. If they decide to eliminate the matching contributions to the plan prospectively, can they now be considered a non-ERISA 403(b)? If so, would they need to restate their current document (a volume submitter doc) to a non-ERISA 403(b) document?

Any advice or information would be much appreciated!

ETA: Will also want to allow for multiple investment providers going forward.

I believe that as long as the plan contains employer contributions that it would be subject to ERISA. Best approach is to adopt new 403b plan to accept only employee contributions as of a prospective date which meets the requirements for exemption from ERISA under DOL regs.

[Guest evenstar38]

Thanks for the response. Just to clarify - even if the client stops all employer contributions to the plan, you believe it will still be subject to ERISA. So, in essence, once a plan becomes subject to ERISA due to the employer contributions, it can never be non-ERISA?

What if we roll the employer assets to a 401(a) plan that only allows for employer contributions? Would that change the ERISA status of the remaining 403(b) plan?

TIA!

[QDROphile]

How do you propose to "roll" the assets? You need distributions to have rollovers, and you can't have distributions without termination of employment or plan termination. You cannot transfer from 403(b) to 401(a).

[Guest evenstar38]

How do you propose to "roll" the assets? You need distributions to have rollovers, and you can't have distributions without termination of employment or plan termination. You cannot transfer from 403(b) to 401(a).

Good point - I didn't think about that.