With many church plans looking to move to a 401(k) plan, what thoughts does anyone have regarding parsonage allowance rules under 401(k) plans?

That's a good question. I know that a "Church Plan" can designate a portion (or all) of the distributions as a housing allowance - if the person is eligible. I am not sure how this works (or if it works) with a 401k plan. I'm most familiar with plans organized under 403(B)(9) making this provision. I'll look forward to how others will answer this.

Blessings - Mike

You might want to click on this link:

http://benefitslink.com/boards/index.php?showtopic=11921

or

http://benefitslink.com/boards/index.php?showtopic=2055

Although these refer specifically to 403(b) plans, the rules should be the same for 401(k) plans.