Retirement Topics - Who Can Participate in a 403(b) Plan?
The following employees are eligible to participate in a 403(b) plan:
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Employees of tax-exempt organizations established under §501(c)(3) of the Code.
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Employees of public school systems who are involved in the day-to-day operations of a school.
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Employees of cooperative hospital service organizations.
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Civilian faculty and staff of the Uniformed Services University of the Health Sciences (USUHS).
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Employees of public school systems organized by Indian tribal governments.
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Certain ministers if they are:
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Ministers employed by §501(c)(3) organizations.
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Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer.
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Ministers (chaplains) who meet both of the following requirements.
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They are employed by organizations that are not §501(c)(3) organizations.
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They function as ministers in their day-to-day professional responsibilities with their employers.
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The "universal availability rule" means that if an employer permits one employee to defer salary into a 403(b) plan, the employer must extend this offer to all employees of the organization. However, the employer may exclude certain employees from the plan:
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Employees who will contribute $200 or less annually.
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Employees who normally work less than 20 hours per week.
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Students performing services described in Code §3121(b)(10).
Additional Resources:
Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations
Publication 4482, 403(b) Tax-Sheltered Annuity for Participant
Publication 4546, 403(b) Plan Checklist
Page Last Reviewed or Updated: 2013-04-23
