We try to alert our clients when we begin to see a trend
developing. One trend our benefits attorneys have been
addressing for private school clients is the fact that their
third-party plan auditors have found that schools using 403(b) plan
documents prepared by TIAA CREF do not (and cannot, as written)
match their actual administration of plan
eligibility.
The problem is that most schools want to exclude from the plan,
coaches, substitute teachers, and other periodic or very part-time
employees who work less than 20 hours per week. Although the
school can do this legally under the 403(b) regulations, the TIAA
CREF adoption agreement only allows exclusion of these less than
part-time employees if the plan is a governmental plan. This
is causing many of our schools' plans to incur administrative
errors because they are not administering the plan in compliance
with the document's terms.
