Ask the Experts March 14, 2017

(b)lines Ask the Experts – Can Churches Sponsor 457 Plans?

“I recently started working with a religious entity that sponsors a 457(b) plan. I thought that churches couldn’t sponsor 457(b) plans? Am I incorrect?”
Reported by

David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer: 

This is one of those questions where, as is often the case with church plans, the answer differs depending on the type of employer. If the entity is a “steeple” church or qualified-church-controlled organization (QCCO) under Code Section 3121(w), then you are correct. Such organizations are not eligible employers under code Section 457, and thus cannot sponsor 457(b) plans.

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However, tax-exempt entities which are NOT churches or QCCO’s, such as church hospitals, nursing homes, and religious colleges/universities, can indeed maintain 457(b) plans. Thus, it is quite important to know the type of church entity with whom you are working in determining whether or not that organization may sponsor a 457(b) plan. However, note that some cases have been filed challenging whether non-QCCOs can establish church plans at all, and the Supreme Court is expected to rule on that later this year. 

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.  

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Break from the Grind March 13, 2017

TRIVIAL PURSUITS: From where did the tooth fairy originate?

Reported by

Several online sources note that he tooth fairy is a relatively recent creation, but like other myths, evolved over time.

Early Norse and European traditions suggest that when a child lost a baby tooth, it was buried to spare the child from hardships in the next life. A tradition of the tooth fee originated in Europe for a child’s first tooth, and Vikings used children’s teeth and other items from their children to bring them good luck in battle.

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There’s also the more general tradition of a good fairy in Europe that was birthed out of fairy tales and popular literature in more recent times. Ultimately the most popular version of a ‘tooth deity’ is the image of a mouse, who would enter children’s rooms and remove baby teeth. This tradition is prominent in Russia, Spain and many Asian countries. More recently, when the 6th tooth fell out, the child was rewarded with a gift in many northern European countries. The reason for the mouse being synonymous with so many culture’s tooth fairy tradition is the fact that rodents continue to grow their teeth their entire lives.

The tooth fairy in the U.S. was inspired by the legend of the mouse mentioned earlier and the good fairy myth. In 1927 or so, a book popularized what would consider to be the modern tooth fairy. The legend was obscure for a while, but with the popularity of Walt Disney’s fairy characters, the tooth fairy gained popularity and quickly became a presence in most households.

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