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Are 403(b) plans subject to the Code's prohibited transaction rules?

Guest Gibson

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I assume you are talking about a governmental 403(B) plan, in which case the answer is no. Code section 4975 does not apply to governmental plans at all. Code section 503, which is the source for the prohibited transaction rules for governmental 401(a) plans, does not apply to 403(B) plans.

I should caution you, however, that applicable state law may in some instances impose requirements similar to the prohibited transaction rules.

Employee benefits legal resource site

The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances.

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