Gilmore Posted March 8, 2023 Posted March 8, 2023 My apologies if this has been answered before. I saw one post from 2018 that was not very conclusive. Is it possible for a 403(b) plan to allow for prevailing wage contributions in the 403(b) plan, as is possible in a 401(k)? So the fringe benefit portion of the prevailing wage, if not used for any other purpose, would be deposited in the 403(b) rather than given out as cash. I'm assuming if it is allowed it would be subject to the availability in the plan document and the service providers limitations. Thanks very much.
hr for me Posted March 9, 2023 Posted March 9, 2023 yes, we do and it has to do with the setup of the plan allowed contributions along with the setup of payout of the PW contributions. Our H&W TPA helps with the calculations (we do a 2 month holdback on the wages for other benefits like health, life ins, STD, admin fees and then the overage goes to the 403b)
Peter Gulia Posted March 9, 2023 Posted March 9, 2023 Beyond reading a retirement plan’s governing documents and a plan’s agreement with a recordkeeper or other service provider, the employer/administrator should read the particular prevailing-wage statute and implementing rules (these can vary by State and political subdivision, place of work, and other factors) and the particular labor agreement (which might specify prevailing-wage provisions less flexible than those the prevailing-wage law permits). Gilmore 1 Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
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