Investments in a 403(b)(9) plan

[403(b)(9)]

May funding investments in a 403(b)(9) plan consist of a brokerage account holding assets other than annuities and mutual funds, such as stocks, bonds, ETF's, Partnerships, etc.? May the Trust hold real estate, collectables, etc., which would be owned and custodied by the Trust, FBO the Participant?

[John Feldt ERPA CPC QPA]

Yes, but I think they have to have a written plan document that allows such investment. Otherwise, I don't think a non-electing (non-ERISA) church plan has to have a plan document for a 403(b) plan that invests only in mutual funds and annuities.

Also, it is my understanding 403(b) plans are generally not in trusts or have trustees, in contrast to this being required for qualified retirement plans.

This reply of "Yes" is not advising you on the suitability of investing in difficult to value illiquid or ridiculously speculative assets for retirement income purposes, and certainly not advising you on investing in tulips or other "collectibles".

[403(b)(9)]

Thanks for your reply. I was looking for confirmation of my own opinion.

There is a written plan since the Trust will be holding brokerage accounts, and physical assets as well, in some cases. Your are correct that 403(b) plans do not need Trustees, but 403(b)(9) is a unique aminal. Retirement Income Account Plans need aTrust and a Trustee. In this case it operates as a QRP, but is not subject to ERISA.

There is a non-profit corporation which is an Association of Churches. It controls another non-profit corporation which, by State Law, may function as a Church Benefits Board and is authorized to offer, fund, and administer 403(b)(9) church plans. It may also serve as Trustee. The State Banking Commission does not regulate the Trust or Trustee since it is authorized by a specific State Law.

Again, thanks for your confirmation.