We have a church in which the ministers are enrolled in the 403B plan through the denomination. The non ministerial staff has also been receiving a 12% contribution to the 403B plan. They are reviewing this plan for changes. Would it be possible for the non ministerial staff to open a SEP IRA account for the local church and exclude the ministers? The ministers may want to remain with the current 403B plan because of better benefits they receive.

While the 403(b) is subject to the universal availability rules, the church is exempted. Therefore, the church may cherrypick the employee who are eligible for the plan. The SEP IRA, on the other hand, does not have the functionality to exclude members by class. It is possible to include the ministers in the SEP, as well has allowing them to remain in the 403(b). They are separate for 415 purposes as well.