Universal Availability - Effective Opportunity

[jpod]

The IRS' recent LRMs for 403(b)s indicated that you can have a 30-day waiting period before you let people start making elective deferrals. Is there any other IRS guidance interpreting the "effective opportunity" element of the Universal Availablity rule? Suppose a client has a standard 90-day probationary period for all new employees. Can it hold them out until the 90 days are up?

[John Feldt ERPA CPC QPA]

In a recent SunGard webinar, S. Derrin Watson didn't think the IRS would go for that.

I think that a Mass Submitter could certainly propose that in their 403(b) document submission for the IRS to review - there is no harm in making an attempt to do that. Just don't hold your breath thinking that they will give it a stamp of approval.

[Kevin C]

Effective opportunity is defined in 1.403(b)-5(b)(2). If you put that with the universal availability general rule in -5(b)(1), I don't see justification there for a waiting period for deferrals. But, the IRS wrote the rules, so they should know what they mean. If they say monthly entry is ok, I'm not going to argue with them.

There was a comment made by an IRS representative at the ASPPA annual conference DC Q&A session a couple of years ago dealing with entry dates. There was a thread here that mentioned it.

[John Feldt ERPA CPC QPA]

I think this might be that reference?

http://benefitslink.com/boards/index.php?/topic/46695-403b-eligiblity-period/#entry206201