IRS Provides 403(b) Plan Relief for Improper Exclusion of Part-Time Employees

By and on December 18, 2018

The IRS recently released Notice 2018-95 to provide transition relief to 403(b) plan sponsors that improperly excluded part-time employees from making elective deferrals under their plans. Employers must begin to operate the part-time employee exclusion under their 403(b) plans correctly for the plan year immediately following the transition relief period, which will mean as soon as January 1, 2019 for many 403(b) plan sponsors. In addition, going forward, many employers will need to amend their 403(b) plans to properly reflect the conditions that must be satisfied to exclude part-time employees from 403(b) plan participation.

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McDermott Will & Emery






Joseph K. Urwitz
Joseph (Joe) K. Urwitz focuses his practice on employee benefits, executive compensation and Employee Retirement Income Security Act (ERISA) fiduciary matters. He advises clients on a wide range of issues, including fiduciary duties and prohibited transactions, employee benefit matters arising in mergers and acquisitions, benefits issues unique to nonprofit entities, deferred compensation arrangements, equity award and bonus plan design, employment and severance arrangements, and qualified plan work. Read Joe Urwitz's full bio.

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