Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney.
Hey Joel,
My prospect is a 501(c)(3) organization that is not affiliated with a church or school. Are they eligible for a 401(k) plan? Are there any benefits over a 403(b) plan?
- Contemplating in Kansas
Dear Contemplating,
Contemplate no more! A 501(c)(3) organization is a nonprofit organization and can sponsor either a 401(k) plan or a 403(b) plan. In 1996, the law changed allowing nonprofit organizations to choose either the 401(k) or 403(b) plan for their employees. Here are some key differences between the two types of plans:
Hopefully that sheds some light on the differences between a 401(k) plan and a 403(b) plan.
The ERISA Wizard,
Joel Shapiro
About Joel Shapiro
As a former practicing ERISA attorney Joel works to ensure that plan sponsors stay fully informed on all legislative and regulatory matters. Joel earned his Bachelor of Arts from Tufts University and his Juris Doctor from Washington College of Law at the American University.
ACR#297176 09/18