Not all 403(b) plans must file the Form 5500—but 403(b) plans that are covered by ERISA do. The deadline for calendar year 403(b) plans that are covered by ERISA is July 31—visible on the horizon. And one of the statistics that must be reported on the Form 5500 is the number of participants.
There is a unique way that active participants are counted in 403(b) plans, due to the universal availability rules. Employees who otherwise make/receive no contributions to the 403(b) plan (elective deferral OR employer), may still be considered to be active participants, if they are eligible to make elective deferrals to the 403(b) plan, but choose not to do so. And, in most 403(b) plans, few, if any, employees are excluded from the right to make elective deferrals, and thus must be counted as active participants.
Editor’s Notes:
The content in this tip appeared in its entirety here.
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