403(b): Title I?

[Felicia]

It is my understanding that there are 403(B) plans that are not subject to ERISA even though the employer makes contributions. Section 4(B) of ERISA provides an exception for governmental plans as defined in section 3(32), church plans, .... 3(32) defines governmental plans as "a plan established or maintained for its employee by the government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing."

It seems to me that if an entity falls into one of these categories, it will not be subject to ERISA. Is this true, even if the entity adopts a plan document which indicates it is a 403(B) plan but spells out operational provisions similiar to a 401(a) plan; provides that the plan can be terminated at any time (although I believe 403(B) plans cannot be terminated); which has a summary plan description (without the Statement of ERISA Rights); and which appears to comply with other DOL provisions which are relevant to ERISA plans? In other words, can an entity comply with the Internal Revenue Code and certain provisions of ERISA without subjecting itself to ERISA? Does 4(B) "preempt" all other provisions of the Code and ERISA?

[Guest bill mahoney]

Felica,

If any employer contributes money to any type of retirement plan other then a SEP or SIMPLE IRA they are subject to ERISA.

[Ellie Lowder]

Governmental groups are exempt from Title I of ERISA - doesn't matter if employer contributions are being made. This includes public education institutions. Employers can certainly choose to follow Title I requirements - but that does not make the governmental employer an ERISA plan.

[Felicia]

Thanks. I agree with you, Ellie. I think the confusion lies when an entity adopts a "plan" that looks like a Title I 401(a) plan.