Minimum Funding Standards for Church Plans

[Guest Patrick Foley]

Since Code Section 412 does not apply, the only funding requirement I have found for church plans is in Treas. Reg. 1.401-6©(2), which appears to be a safe harbor but not an absolute requirement. However, it appears that there must be SOME funding for the plan to escape disqualification under Rev. Rul.71-91.

Is there authority on church plan funding that gives more definite guidance than this? Or, absent anything more definite, how do you advise clients on funding of church plans?

[Carol V. Calhoun]

The only requirement to which church plans are subject under federal law would be the funding requirements of pre-ERISA I.R.C. section 401(a)(7). I.R.C. section 412(h). And as you correctly point out, these requirements are not very meaningful as interpreted by Rev. Rul. 71-91.

Of course, church plans are not subject to ERISA preemption of state law. However, in practice, few states seem to regulate them.