Jennifer D. Posted September 4, 2019 Share Posted September 4, 2019 I have a prospective client who has a non-Erisa 403(b) for the NHCEs to defer, and an ERISA 403(b) for the charter founders to defer and get a PS contribution. We've been called in because while the non-ERISA document excludes charter founders and the ERISA document excludes everyone else, a founder had been deferring to the non-Erisa plan and got a profit sharing contribution in the Erisa plan (she did not defer to the Erisa plan). My questions are - can you set the plans up this way - ie can you aggregate the non-Erisa and Erisa plans to make sure the NHCEs aren't discriminated against for coverage, and if so, does it all get messed up with having the 1 founder deferring into the non-Erisa plan (I know it violates the document but it only happened this year so we should be able to amend the doc to permit it). Thoughts? Link to comment Share on other sites More sharing options...
Peter Gulia Posted September 4, 2019 Share Posted September 4, 2019 Leaving aside questions about whether either (or any) plan is not governed by ERISA, Your description doesn't say whether all, some, or none of the charter founders are highly-compensated employees. Remember, because a charity has no 5%-owner, there might be few highly-compensated employees, or even none. Counting the exact numbers of HCEs and NHCEs might affect some analysis on your questions. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Patricia Neal Jensen Posted September 4, 2019 Share Posted September 4, 2019 After 2009, a Non-ERISA plan which depends on an ERISA plan for an allocation rule causes the "Non-ERISA" plan to become ERISA. I would argue that you have two ERISA plans (instead of an ERISA and a Non-ERISA) and therefore, perhaps, (see Peter's comment) problems with the PS allocation. If the auditor tracks with the theory I am referencing, you also have problems with not filing a 5500 for the plan you thought was Non-ERISA. PNJ JackS 1 Patricia Neal Jensen, JD Vice President and Nonprofit Practice Leader |Future Plan, an Ascensus Company 21031 Ventura Blvd., 12th Floor Woodland Hills, CA 91364 E patricia.jensen@futureplan.com P 949-325-6727 Link to comment Share on other sites More sharing options...
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