Eligibility

Both 403(b) and 457(b) Plans must establish rules for eligibility.

The Internal Revenue Code rules require that all employees eligible for a:

• 403(b) Plan be given an opportunity to enroll and/or change contribution levels at least annually.
• 457(b) Plan be limited to individuals who perform services for the employer.*

403(b) Plans may exclude you if you:

• Are a student
• Are a non-resident alien
• Participate in a 401(k) or 457(b) Plan, or another 403(b) Plan offered by the employer
• Contribute $200 or less per year
• Normally work less than 20 hours, on average, per week (1,000 hours per year)

457(b) Plans may define eligible or excluded employees based on reasonable business classification. Also, they may choose to allow participation even if you fall into one of the categories above.

The terms of your employer’s Plan specifies when you may enroll. However, a 403(b) Plan is generally required to allow all eligible employees to participate in the 403(b) Plan when their employment begins (the Universal Availability rule). You should check with your employer to find out how to enroll.

*This includes independent contractors.