Can a church or church affiliated org opt out of ERISA with a 401(k)?

Church plans, of whatever variety, are not covered by ERISA, and no "opt-out" is necessary to accomplish this. Thus,if a church adopts a 401(k) plan, it will not be subject to ERISA Title I, but will be subject to the Internal Revenue Code's 401(k) rules. However, because most churches will not have "highly compensated employees" as defined for purposes of the 401(k) and other nondiscrimination/coverage tests, a 401(k) maintained by a church may not look that much different than a 403(B) retirement income account plan maintained by a church. Finally, a church plan can always opt in to ERISA Title I coverage by making the election called for in section 410(d) of the Code. Hopefully, the above responds to your inquiry.

For anyone who is interested in a comparison of 401(k) and 403(B) plans, I've posted a chart comparing the two types of plans. Although the chart also discusses 457 plans, which are not an issue for churches, it may be useful to churches wanting to compare the other two types of plans.
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