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Retirement Topics - Who Can Participate in a 403(b) Plan?

The following employees are eligible to participate in a 403(b) plan:

  • Employees of tax-exempt organizations established under §501(c)(3) of the Code.
  • Employees of public school systems who are involved in the day-to-day operations of a school.
  • Employees of cooperative hospital service organizations.
  • Civilian faculty and staff of the Uniformed Services University of the Health Sciences (USUHS).
  • Employees of public school systems organized by Indian tribal governments.
  • Certain ministers if they are:
    • Ministers employed by §501(c)(3) organizations.
    • Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer.
    • Ministers (chaplains) who meet both of the following requirements.
      • They are employed by organizations that are not §501(c)(3) organizations.
      • They function as ministers in their day-to-day professional responsibilities with their employers.

Universal availability rule

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. 

The employer may exclude certain employees from the plan:

  • Employees who will contribute $200 or less annually
  • Those employees who participate in a 401(k) or 457(b) plan or in another 403(b) plan
  • Employees who normally work less than 20 hours per week
  • Students performing services described in Code §3121(b)(10)

Additional resources

 

Page Last Reviewed or Updated: 15-Aug-2014