Special Rule for 403b's?

[austin3515]

Can you confirm that there is no way for the HCE's in a 403b plan to get an employer noneletive contribution without including some non-highly's?

I just remember some nondiscrimination revenue procedure unique to 403b's / non-profits. a) I think that was superseded by the new regs and b) I think even that required some level of employer contributions.

I think it said something like the HCE's could always get a 1/3 more without worrying about testing, or something like that.

[QDROphile]

Are you looking for something outside of Treas. Reg section 1.403(b)-5?

[ETA Consulting LLC]

When you provide a nonelective contribution to a 403(b), you must satisfy the 401(a) rules associated with it; especially non-discrimination under 401(a)(4). Before we go off on a tangent, this isn't saying "general test" the plan, but merely not discriminating in favor of HCEs (against NHCEs).

I do remember a 30% rule for Section 125 plans saying that "Key" Employees (or something) may not exceed 30% of the overall benefit during a year; or their amounts will not be pre-tax. I vaguely remember something like this.

Good Luck!

[austin3515]

It was notice 89-23 and it was definitely obsoleted. They have to play by all the same nondiscrimination rules as profit sharing.

http://www.relius.net/News/TechnicalUpdates.aspx?ID=458