If your organization offers a 403(b) retirement plan that is also subject to nondiscrimination testing (NDT), it's important that your retirement plan documents, policies and procedures clearly outline how you administer...
If your organization offers a 403(b) retirement plan that is also subject to nondiscrimination testing (NDT), it’s important that your retirement plan documents, policies and procedures clearly outline how you administer:
Universal availability generally means that if an employer allows one employee to make salary deferral contributions to a 403(b) plan, the same opportunity must be offered to all eligible employees.
Employees should receive an Effective Opportunity Notice from their organization outlining the timeframe during which they may make, change or revoke their deferral elections.
Find a sample Effective Opportunity Notice at the end of this page, provided by GuideStone®.
Several factors help determine whether employees have an effective opportunity to make elective deferrals, including:
In addition to verbally informing employees of their ability to make salary reduction contributions when they come to the Human Resources department, it is generally accepted that the IRS would like to see evidence that employees were notified in writing of their ability to make salary reduction contributions.
The IRS has issued additional details on the language required in all 403(b) plan documents regarding elective deferrals and the employee's annual effective opportunity, which can be found in the 403(b) Plan Listing of Required Modifications and Information Package (LRM). If your organization is like most others, you provide this notice to all new hires and may already be in compliance.
A key takeaway from the LRM is that every employer should provide newly eligible employees with a notice of their right to make elective deferrals no later than 30 days after hire.
The IRS guidance from the LRM states that every new hire must have at least 30 days after receiving their notice to make any deferral elections. Many employers allow participants to make deferral elections at any time. Again, if this is your organization's policy and procedures, you may already be in compliance with these regulations.
You may want to review your formal process for keeping employees informed about their ability to start or make changes to salary reduction contributions to the 403(b) Retirement Plan. Contact GuideStone for more information.
If you need help creating an Effective Opportunity Notice, GuideStone provides the template further below.
You may modify this sample and develop your own annual notice to inform eligible employees of their opportunity to make deferrals into the 403(b) plan. This notice is provided for convenience only and has not been approved by the IRS. You should review your plan and modify this document to correspond with the terms of your plan. Before sending out the annual notice, you will need to know:
Annual Notice of Right to Participate in 403(b) Plan
To: All eligible employees of <Employer name>
From: <Human Resources Director or Other Business Official>
Date: <Date>
Re: Notice of your right to participate in the 403(b) Retirement Plan of <Employer name>
In compliance with the 403(b) regulations, we are pleased to notify our employees of the availability of a 403(b) plan in which salary reduction contributions <including Roth contributions> can be made.
Eligible employees have the opportunity to make contributions to the 403(b) plan by submitting a Retirement Contribution Agreement (RCA) to the <Payroll / Human Resources / Benefits Department>. The requested salary reduction contributions will begin [<at any period / each month / each quarter> at the first payroll period following receipt of the RCA].
The following information is available to aid employees participating in the plan:
Generally, employees can make salary reduction contributions in an amount up to the lesser of 100% of your includible compensation or <$XX,XXX>* to all elective deferral plans in which you participate. Additionally, the plan permits eligible employees aged 50 or older to make catch-up contributions of up to <$X,XXX>* in the current tax year.
Please be sure to consult with your legal or tax advisor before participating in the 403(b) plan. The <name of employer> does not provide tax or legal advice.
Understanding 403(b) universal availability and effective opportunity requirements is an important part of administering a 403(b) plan subject to NDT. Regularly reviewing your plan documents, employee notices and administrative procedures can help ensure eligible employees have the opportunity to participate in the plan as intended.
For more information, contact us at Info@GuideStone.org or 1-888-98-GUIDE (1-888-984-8433), Monday through Friday, from 7 a.m. to 6 p.m. CT.
*Find updated numbers to include every year at GuideStone.org/ContributionLimits.
The information on this website is for educational purposes only and is provided with the understanding that GuideStone is not rendering legal or tax advice.
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• Oct 29, 2026 