EMPLOYEE PLANS

REG–149752–03, page 707. Proposed regulations under section 410(b) of the Code allow employees of a tax-exempt organization who are eligible to make salary reduction contributions to a section 403(b) plan to be treated as excludable employees for the purpose of testing whether a section 401(k) plan or a section 401(m) plan meets the minimum coverage requirements contained in section 410(b) if two conditions are met. This modification was directed by Congress in section 664 of the Economic Growth and Tax Relief Reconciliation Act of 2001.