A church association wants to sponsor a 403(b) plan that will cover all of the churches that are members of the association. I assume this is okay to exclude certain member churches if it is desired. Anyone have any comments or anything else I should be aware of?

Churches are exempt for the rules requiring coverage of all employees who work more than 20 hrs a week for salary reduction and do not have to provide nondiscriminatory employer contributions. Church must meet the requirments of IRC 3121(w)(3)(A) not 414(e) and can include a qualified church controlled organization. Church plans are subject to comp limit of 220k. See IRC 403b12 and pub 571 for rules for church employees.

Let's say for example the Virginia State Methodist Association wanted to start a plan for all of its members. The association doesn't really have any control over these churches. Is it possible to have one plan that would encompass all churches? It seems the code does allow for this but I may be misinterpreting.

There are some churches that sponsor 403b plans for their affiliated members either through 403b providers or through their own managed 403b funds. You need to review the rules for chuch controlled organizations under 3121w3 with counsel as the defintion of a church is really inside the beltway information because of the powerful interests who are afffected by the definition. Have you discussed this issue with counsel for the church?

Not yet due to these are just preliminary talks but i do agree to get counsel involved.