Generally, if an employer has a §403(b) plan, all employees must be permitted to make salary reduction contributions.
In addition, all employees must be provided the opportunity to defer a portion of their compensation pursuant to a salary reduction agreement. This is commonly referred to as the "universal availability" requirement. This 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.
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 governmental 457 plan, or in another 403(b) plan maintained by the employer.
- Non-resident aliens.
- Employees who worked less than 1,000 hours in the previous plan year or new employees expected to work less than 1,000 hours in their first 12 months of employment.
- Students performing services described in section 3121(b)(10).
To determine your eligibility, you should contact your employer directly.
A Roth account option may also be available under your Employer's plans. Roth contributions are made with after tax amounts, but, subject to certain requirements, not taxed when distributed.
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