When to count BoD... and maybe a MEP?

[AlbanyConsultant]

I've got three NFPs who want to establish a common plan because they are essentially three cooperative arms of the same service - they share an Executive Director and many admin functions, and there is some board overlap.

First - I know there's an 80% threshold for commonality of board members to determine if it's a controlled group or not. At what point is that looked at? Board positions begin/expire in the middle of the plan year, so do I look at BOY, EOY, or include everyone who as on the board at any point during the year?

Second - Even assuming that it's all throughout the year, I don't think that I meet the 80% level. So if these entities want a single plan, it would have to be a MEP. I know that MEPs are a thorny enough issue with 401(k) plans - is there anything in the 403(b) world that would prevent one?

Thanks.

[mbozek]

I never heard of a mep in a 403b plan. One peculiar feature of a 403b plan is that there is no requirement that the plan be limited only to employees of the sponsoring employer. As I recollect the language of the regs refers to 403b contracts. Need to check the 403b regs to confirm that 403b plan can include employees of different employers.

[AlbanyConsultant]

Not that this means it's OK, but there are several vendors selling 403(b) MEPs, so it must work... somehow.

[Peter Gulia]

AlbanyConsultant, two thoughts:

Your observation about a possible multiple-employer plan is clearer if you delete the last five words and focus on the first six words.

Consider whether, even if the governors might not result in common control under 26 C.F.R. 1.414©-5(b), there might be some opportunity for permissive aggregation under -5©(1) if the organizations sufficiently coordinate their activities.

[AlbanyConsultant]

That's what I've been looking into. The "main company" already has an ERISA attorney on retainer (!), so I've asked her to review the situation and that reg specifically. Thanks.