Who Can Participate in a 403(b) Plan?

Any eligible employee can participate in a 403(b) plan.

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

• Employees of tax-exempt organizations established under section 501(c)(3). These organizations are usually referred to as “section 501(c)(3) organizations” or simply “501(c)(3) organizations.”

• 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.

• Employees of public school systems organized by Indian tribal governments who are involved in the day-to-day operations of a school.

• Certain ministers (explained next).

Ministers. The following ministers are eligible employees for whom a 403(b) account can be established.

1. Ministers employed by section 501(c)(3) organizations.

2. Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is an eligible employer.

3. Ministers (chaplains) who meet both of the following requirements.

a. They are employed by organizations that aren’t

section 501(c)(3) organizations.

b. They function as ministers in their day-to-day pro fessional responsibilities with their employers.

Throughout this publication, the term “chaplain” will be used to mean ministers described in the third category in the list above.

Example. A minister employed as a chaplain by a state-run prison and a chaplain in the U.S. Armed Forces are eligible employees because their employers aren’t section 501(c)(3) organizations and they are employed as ministers.

Universal availability. Generally, all eligible employees (with certain exceptions) of an employer must be permitted to make elective deferrals (including Roth elective deferrals) if any employee of the employer may make elective deferrals. If your employer offers a 403(b) plan, you

should have received information about your eligibility to participate.