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Can a 501(c)(3) Establish a 403(b)?

Q: Would a 501(c)(3) organization that is classified as a religious organization under Internal Revenue Code Section 509(a)(1) be eligible to establish a 403(b)(9) plan?

A: Internal Revenue Code Section 403(b)(9)(B) says that a retirement income account can be established or maintained by “a church or a convention or association of churches, including an organization described in section 414(e)(3)(A).” Note that this includes an organization which “shares common religious bonds and convictions with that church or convention or association of churches” (Section 414(e)(D)). Such organizations would be subject to the nondiscrimination rules of Code Section 403(b)(12), since only churches and qualified church controlled organizations described in Internal Revenue Code Sections 3121(w)(3)(A) and (B) are exempt from those requirements.