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. However, certain employees may be excluded from the plan:

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

This condition requires extra care from the employer. It’s easy to mistakenly assume certain employees who only have a support role with the organization or who work in what is typically considered a part-time role are not eligible for the plan merely by the classification of their position in the organization. Examples of such groups include:

• Nurses
• Substitute teachers
• Bus drivers
• Maintenance workers
• Employees who are not full-time, not permanent, and/or non-contract.

A mistake in this area may lead to the entire 403(b) plan losing its tax-deferred status.