Any eligible employee can participate in a 403(b) plan.

Eligible employees. The following employees are eligible to participate in a 403(b) plan.

• Employees of tax-exempt organizations established under section 501(c)(3) of the Internal Revenue Code. These organizations are usually referred to as section 501(c)(3) organizations or simply 501(c)(3) organizations.
• Certain employees of public school systems. These are employees involved in the day-to-day operations of a school.
• Employees of cooperative hospital service organizations.
• Civilian faculty and staff of the Uniformed Services University of the Health Sciences (USUHS). (Contributions made after 1979 for the benefit of faculty and staff of USUHS are subject to the rules described in this publication.)
• Employees of public school systems organized by Indian tribal governments.
• Certain ministers (explained next).

Ministers. The following ministers are eligible employees for whom a 403(b) account can be established.

1. Ministers employed by section 501(c)(3) organizations.
2. Self-employed ministers. A self-employed minister is treated as employed by a tax-exempt organization that is a qualified employer.
3. Ministers (chaplains) who meet all three of the following requirements.
1. They are employed by organizations that are not section 501(c)(3) organizations.
2. They function as ministers in their day-to-day professional responsibilities with their employers.
3. They do not share common religious bonds with their employers.

Note. Throughout this publication, the term chaplain will be used to mean ministers described in the third category in the list above.

Example. A minister employed as a chaplain by a state-run prison and a chaplain in the United States Armed Forces are eligible employees because their employers are not section 501(c)(3) organizations, they are employed as ministers, and their employers do not share their religious affiliation.

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