Changing from QCCO to non-QCCO status

A religious school that gets no funding from the diocese anymore is nonetheless still qualified as a QCCO. The school was established in the 1950s, and we suspect that it would have qualified prior to the adoption of the QCCO rules. The school has been told that they likely would not qualify as a QCCO if they were to seek it out now, although they are still listed as a church related entity in the master list of catholic organizations. 

The issue arose because the school wants to adopt a 457 plan. They are considering whether to "reclassify" itself as a non-QCCO.

ERISA and tax-qualification issues for their existing plan aside, have you seen a religious school undertake this process? Any thoughts?

PS: We realize that it can still adopt a 409A plan instead, but they would prefer that distributions be eligible for rollover treatment. 

For a § 457(b) plan to provide an I.R.C. § 402(c)(4) “eligible rollover distribution”, wouldn’t the plan need to be a governmental employer’s § 457(b) plan?

Internal Revenue Code (26 U.S.C.) § 402(c)(8)(B)(v) https://www.govinfo.gov/content/pkg/USCODE-2024-title26/html/USCODE-2024-title26-subtitleA-chap1-subchapD-partI-subpartA-sec402.htm.