Q. Suppose an employer offers a 403(b) Non-ERISA plan to her employees, and it's not clear to her which duties she has as an employer that offers this plan. She is aware that the plan sponsor needs to supervise for compliance violations such as borrowing more than $50,000 and taking distributions while still employed and under age 59½.
What's less clear to her is whether, since this is a Non-ERISA situation, the employer has the legal and fiduciary responsibility to address investment fees, investment performance, etc. — as would be the case if it were an ERISA plan.
A. Since ERISA does not apply, the only other source of any potential fiduciary responsibilities would be state statutes. The statutes do vary from state to state, and in many, there is no fiduciary responsibility assigned to the 403(b) plans of public education employers. In some states, there may be fiduciary responsibility assigned. Thus, the employer would need to be aware of the statues in the specific state of domicile.
Note that if the employer is a 501(c)(3) employer, instead of a public education employer, it would need to maintain a "hands off" posture in order to keep the 403(b) plan a non-ERISA plan.
10/13/15
Recent Comments
Does the roth requirement for catch-up contributions for people who earned $145,000 apply to 457...
Hi Ed,
I really liked this article and I think you make a lot of sense. And I had no...
I believe there's a misstatement in that last quote - it should refer to governmental and...
Working with several medical providers as clients, I note that the high-end earners tend to push...
Congratulations to NTSAA for landing a good one. Nathan's breadth of experience and...