Universal Availability-What you need to know.

Universal Availability

Universal Availability is required in all governmental 403(b) plans. It ensures that if an employer allows one employee to make salary deferrals into a 403(b) plan, the employer will offer the same to all employees, except those the law allows to be excluded.

Another feature of Universal Availability requires the plan to give meaningful notice to employees of their right to make elective deferrals. The notice must inform the employees of:

  • The right to make elective deferrals
  • When an election may be made
  • How often during the year elections can be made

It will also inform employees regarding features of the plan such as:

  • Loans
  • Hardships
  • Exchanges
  • Rollovers
  • Roth contributions

A 403(b) plan generally may not place conditions on an employee’s right to make elective deferrals. For example, the plan sponsor cannot require the employee to meet a salary threshold before contributing to a 403(b) plan.

The IRS requires that the plan provide meaningful notice to all participants. This must be done once a year via email or hardcopy, as well as at the time of employment. If they fail to meet the Universal Availability rule, such failure could disqualify the plan and cause the plan to fail an IRS audit. To help administer the plan, NBS generates a Universal Availability notice and provides this notice to each plan sponsor two times per year.

It is important to remember the Universal Availability rules regulate 403(b) plans only and not other plans that an employer may offer. For example, a 401(k) or governmental 457(b) plan will offer a Highlight Page to its participants to help explain the plan. NonGovernmental 457(b) and 457(f) plans generally do not provide Universal Availability or Highlight pages to their participants. Instead, they provide a yearly summary of the plan.

If you have further questions you can contact your dedicated Relationship Manager at National Benefit Services.