EBSA Lets Nonprofits Keep Annuity Plans Out Of ERISA

Because of the new flexibility, determining whether any particular employer has established a plan covered by the ERISA Title I pension rules now requires a case-by-case analysis, Doyle writes in the bulletin.

Terminating a 403(b) plan and using a single document to coordinate the efforts of various annuity providers and plan trustees or custodians would not put the plan out of compliance with the safe harbor, Doyle writes.

In addition, a 403(b) plan will not, in the Labor Department's view, come under ERISA Title I pension plan rules "merely because the written plan conforms to the new 403(b) regulations by limiting employees to exchanges of contract funds only among providers who have adopted the written plan, or transfers from the program of a former employer to that of the current employer," Doyle writes.

Employers must allow annuity providers to offer plan members a reasonable choice of products, but it can put a reasonable limit on the number of providers, Doyle writes.