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403(b) Plan Eligibility Scrutinized by IRS

On the top of the list of items that IRS agents will scrutinize during an examination of exempt organizations and schools is retirement plan eligibility and participation.

Organizations with 403(b) type retirement plans generally need to make them available to all workers who are eligible to participate. There is an exception for employees who work fewer than 1,000 hours a year.  The IRS knows from auditing these types of organizations that a common mistake made by the organization is to wrong-fully exclude part-time and temporary workers, including substitute teachers, adjunct professors, seasonal employee and the like from participating in the plans.

Double check your employee list to make sure all that qualify are offered the opportunity to participate.
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