The U.S. Supreme Court handed down a major decision on June 5, 2017, affecting religious and church affiliated organizations that offer a retirement plan to their employees. In recent years, several lower courts have held that only churches can sponsor a retirement plan exempt from ERISA regulations and such religious and church affiliated organizations are subject to the complex reporting requirements generally associated with a 401(k) or 403(b) Plan. Religious and church affiliated organizations are to be distinguished from the most traditional looking religious organization operating out a church (think steeple & pews). With the Court’s ruling, yesterday, religious and church affiliated organizations can continue to offer retirement plans (usually a 403(b) Plan) that are exempt from the ERISA regulations, including being exempt from filing the annually required IRS Form 5500 with the Department of Labor and IRS. Religious organizations that can take advantage of this ruling include hospitals, schools, and retreats/camps that have some sort of religious affiliation.
Leading Retirement Solutions provides services to a number of retirement plans sponsored by churches and religious affiliated organizations. Allowing religious organizations not affiliated with a church to be exempt from the ERISA regulations is great news for our clients who provide this type of retirement plan to their employees.