NMU's Compliance Database - Northern Michigan University

With respect to elective deferrals, a 403(b) plan must meet the requirements of IRC 403(b)(12)(A)(ii), also known as the ‘universal availability’ rule. Under this rule, if any employee of the employer maintaining the 403(b) may participate, then all of the employer’s employees must be given the opportunity to participate.

Employees who are eligible to make elective deferrals must be given an “effective opportunity” to participate. Whether the employee has an effective opportunity is determined by all of the facts and circumstances, including notice of eligibility, the period of time an election may be made, and any other conditions on elections. At least once during a plan year the plan must provide an employee (whether part-time or full-time) with an effective opportunity to make or change an elective deferral election, up to the dollar limit in effect, including any catch-up deferrals permitted under the plan, as well as Roth contributions if the plan permits.