• The IRS ruled that a provision in a "403(b)" tax-sheltered annuity giving church employees the option of purchasing a life insurance contract with a portion of their annual contributions does not adversely affect the continued qualification of the 403(b) annuity plan. A church adopted a 403(b) retirement program for its employees. The arrangement permits employees to elect to use part of their annual contributions under the arrangement to pay premiums on life insurance. This option is provided as part of the employees' "salary reduction agreement" with the church. The salary reduction agreement provides that an employee may direct the investment of a portion of the deferred amounts to the purchase of a whole life insurance contract on the life of the employee, provided at all times less than 50 percent of the total contributions made on the employee's behalf are allocated to the life ...
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