A church matches and contributes a portion of church staff members' salary to a 403(b) plan with an investment firm. Instead of using the 403(b) plan, can the employee direct the church contribution money to an investment option/plan of his or her own? Would there be a problem in changing the church policy to allow staff members to direct their retirement funds where they want to?
The church administration will need to consult its plan documents presumably filed by investment firm. Normally the church as employer must, however, be consistent in its application of plan provisions among all employees. Accordingly, it is not likely that your plan document (nor Section 403(b) of the Internal Revenue Code) will permit this “cash or deferral” choice with the church’s matching portion.