Groom principal and chair of the Retirement Services group, Michael Kreps, discusses when 403(b) plans are exempt from ERISA in the PSCA article, “Is Your 403(b) Subject to ERISA?” This topic was prompted by the PSCA 2025 403(b) Survey data, which shows there are 403(b) plan sponsors that are “Unsure” whether ERISA applies to their plans.
Kreps commented, “government and church 403(b) plans are often exempt from ERISA, as are non-profit plans with very little employer involvement.” He continued to explain, “where participation is voluntary, rights are enforced by the employee, and employer involvement is limited to basic administration and information sharing, the plan may be exempt.” However, he acknowledged that determining if a plan is exempt can be confusing.
Kreps concluded, “most of the ‘Unsure’ plans are probably not subject to ERISA . . . [and] ‘[i]f they haven’t heard of ERISA, chances are they aren’t subject to ERISA.’” But, he cautioned that plan sponsors need to “make sure.”
To read the article, click here.
