Who qualifies as an eligible employee for a 403(b) plan?

An eligible employee for a 403(b) plan typically includes any bona fide employee, which encompasses both full-time and part-time employees. This inclusivity is essential as 403(b) plans are designed for certain tax-exempt organizations, such as schools and hospitals, which may employ a diverse range of staff, including part-time workers who still contribute to the organization's mission.

Choosing only full-time employees, or seasonal or contract workers, would limit participation unfairly and not align with the broad eligibility standards set for 403(b) plans. The structure of such plans aims to ensure that all employees, regardless of their work hours or employment status, have the opportunity to save for retirement through these tax-advantaged accounts, promoting a more equitable savings environment within the organization.