Employer contributions to non-Title I plan

[Felicia]

Can employer contributions be made to a non-Title I 403(B) plan if the employer contributions are not in the form of matching contributions?

[Ellie Lowder]

Sure, if permitted by state law. At least one state (maybe more)didn't permit it, but was in the process of passing enabling legislation because they called me about it.

[PMC]

Wouldn't employer contributions make it a Title I plan?

[Felicia]

Not if it's a governmental plan or another plan listed under ERISA Section 4(B).

[Ellie Lowder]

Thought I would expand just a bit on Felicia's response to you - many folks appear to be confused about Title I coverage. Governmental employers are exempt - doesn't matter if employer contributions are made. Generally, that would be public education institutions - but, could be a state or local gov't hospital that ALSO is a 501©(3) org.

Churches & QCCOs are exempt UNLESS THEY MAKE AN AFFIRMATIVE ELECTION TO BE COVERED - and most don't. Thus, employer contributions do not force ERISA coverage!

Other 501©(3)s are not exempt - thus, employer contributions automatically mean Title I applies. Elective deferrals are exempt AS LONG AS EMPLOYER limits involvement, deferrals are voluntary, etc.

[Guest Ralph Amadio]

Know this is a 403(B) site, but why would employer contributions not be placed in a governmental 401(a)plan, avoiding all of the other regulatory nonsense and allowing money to be trust to trust transferred to either public or private 401 plans, and rolled over to an unrestricted IRA, or in the case of public education, used to purchase credit from the State's TRS? Most states allow this type of plan.