Headlines about "403(b) plans"
Gathered from the web by the editors at BenefitsLink.com.
[Official Guidance] Rev. Rul. 2009-18: List of Obsolete Revenue Rulings and Notices Pertaining to 403(b) Programs (PDF)
3 pages. Excerpt: "[The final 403(b) regulations issued in 2007 noted] that since the prior set of section 403(b) regulations were issued in 1964, a number of guidance documents had become outdated due to numerous intervening statutory revisions enacted in section 403(b). In this section, the Internal Revenue Service (IRS) listed a number of documents that it proposed to obsolete after these regulations became final. The IRS received no comments regarding this prior notice to obsolete these documents." (Internal Revenue Service)
IRS Final List of Out-of-Date 403(b) Documents
Excerpt: "The Internal Revenue Service (IRS) has finalized its list of guidance documents issued in the last 45 years dealing with 403(b) plans declared obsolete in light of the agency's recent comprehensive rules rewrite." (PLANSPONSOR.com; free registration required)
[Guidance Overview] New Rules Allowing Employers to Suspend Nonelective Contributions to Safe Harbor Plans Due to Business Hardship (PDF)
2 pages. Excerpt: "On May 18, 2009, the IRS published rules allowing sponsors of Safe Harbor Plans, including Qualified Automatic Contribution Arrangements (QACAs), to suspend or reduce nonelective contributions before the end of the plan year due to business hardship. These rules provide an attractive alternative to plan termination, which had been the only option for sponsors of Safe Harbor Plans providing required nonelective contributions that needed to reduce or eliminate their ongoing obligations during this time of economic distress. Currently, the rules are only proposed, which means that they are subject to change when they are finalized. However, the IRS will allow plan sponsors to follow them in their current form until they are finalized and will impose any new or more stringent requirements only on a prospective basis. The new rules may be applied to plan amendments adopted after May 18, 2009." (Prudential Retirement)
[Guidance Overview] Mid-Year Elimination of Safe Harbor Non-Elective Contributions
Excerpt: "While many plan sponsors are resorting to cutting back or eliminating company match contributions in a effort to reduce costs, does recent guidance from the Internal Revenue Service on eliminating safe harbor non-elective contributions offer an alternative solution? In May, the IRS proposed rules that would permit employers affected by substantial business hardship to decide mid-year to reduce or suspend safe harbor non-elective contributions to 401(k) and 403(b) plans . . . . What does this mean for 403(b) plan sponsors?" (PLANSPONSOR.com; free registration required)
Fun, Easy and Automatic: Not a Sure Path to Sufficient Retirement Income (PDF)
Excerpt: "[G]ood communication and education must attract employees' attention. And attention-gaining techniques often include fun and games?snappy brochures, fun YouTube videos, intriguing Facebook pages for the plan, and maybe even scratch and sniff enrollment forms. But every education and communication effort must be aimed at enlightening employees about the things successful users of 401k plans do. Getting employees' attention is the start -- not the end." (Ackley Associates)
[Guidance Overview] Centralized versus Decentralized 403(b) Administration
Excerpt: "Some 403(b) plan sponsors have structured their plans with a single investment provider, and the number of plans designed this way has likely increased in the wake of the final 403(b) regulations. Nevertheless, many 403(b) plans continue to include multiple investment providers/recordkeepers." (Richard Turner via PLANSPONSOR.com; free registration required)
[Opinion] Groom Comments on Proposed IRS 403(b) Prototype Plan Program (PDF)
6 pages. Excerpt: "Firm has specific comments on: vesting, selected church plan rules, employer contributions, cash limit, hardship distribution and disability definition." (Groom Law Group via 403bwise)
Choosing Between 401(k) and 403(b) Plans
Excerpt: "BNA has published a brief article on choosing between 403(b) and 401(k) formats for retirement plans at http://www.bnatax.com/tm/insights_kenty.htm. The summary is well written and brief, both of which are real virtues. I have only two comment[s]." (403(b)-457 Plans Blog)
[Guidance Overview] Section 403(b) Plan Participants Need to Correct Defective Contract Exchanges by June 30
Excerpt: "Plan sponsors whose plans permitted exchanges with non-approved vendors after September 24, 2007, and who did not enter into ISAs with such vendors by January 1, 2009, might wish to remind plan participants of the upcoming deadline and the need to re-exchange any such contracts back into the plan in order to avoid the potential income tax consequences." (The Segal Group, Inc.)
[Guidance Overview] 403(b) Plan or 401(k) Plan: How to Decide
Excerpt: "In the half century since Congress created ?403(b) contracts, the regulatory regime has evolved to resemble ever more closely the qualified plan rules. In fact, the IRS announced at the end of 2008 that it intends to create an application for determination procedure for ?403(b) contracts. There remain, however, material differences in the two sets of rules, so that employers that have a choice should consider carefully the relative advantages and disadvantages." (Tax Management Inc.)
[Guidance Overview] How Does 1,000-Hour Rule Apply to Non-Retirement Benefits?
Excerpt: "The 1,000-hour rule is best known in retirement circles but also applies to group welfare plans, with respect to nondiscrimination testing. Unfortunately, it is not applied on a consistent basis and does not apply to all benefits." (Workforce Management; free registration required)
[Opinion] Groom Comments on Proposed IRS 403(b) Prototype Plan Program
Excerpt: "On behalf of Diversified Investment Advisors, Groom Law Group has submitted comments to the IRS detailing ways in which the proposed IRS prototype procedure for 403(b) plans in IRS Announcement 2009-34 could be improved, including allowing vesting schedules for employer contributions and certain church-specific provisions. We also commented on several points in which the language in the proposed List of Required Modifications that accompanied the Notice could be clarified and made more useful." (Groom Law Group)
Trade Groups/Providers Comment on 403(b) Prototype Program
Excerpt: "The deadline for comments on the Internal Revenue Service's proposal for a 403(b) plan document prototype program was June 1, and trade groups and industry providers had a number of concerns. The biggest suggestion among all commenters was to allow prototype plans to include vesting schedules. The SPARK Institute said it believes the most significant revision that is necessary to expand the availability of the prototype program is to permit the use of a vesting schedule in the prototype plan . . . ." (PLANSPONSOR.com; free registration required)
Teachers Union Takes Minnesota County to Court over Vendor Reduction
Excerpt: "The Minnesota District 861 school board may now wish it had heard employees' grievances over the reduction in vendors offered in their 403(b) plan. The Winona Post reports that district officials learned that the teachers union and paraprofessionals union have filed a joint lawsuit in Winona County District Court seeking to compel them to go to arbitration over a decision made last year regarding 403(b) investment offerings. Former school board chair Brian Neil told the unions in January that the matter is not open to arbitration or grievance because it is an issue not governed by union contracts . . . ." (PLANSPONSOR.com; free registration required)
[Guidance Overview] 403(b) Annual Additions
Excerpt: "The section 415 annual additions limit is applicable to 403(b) plans. There is an aggregation of all 403(b) plans of the same employer for the annual additions limit ($49,000 in 2009), including related employers. Like qualified plans, if an employee participates in more than one 403(b) plan in a year with unrelated employers, the section 415 limit applies separately for each employer. However, with a 403(b), the 415 annual additions limit is generally applied as if the employee, and not the employer, maintains the plan. Thus, generally, the 403(b) plan is not aggregated with the qualified plan for 415 purposes." (McKay Hochman Co., Inc.)
403(b) Changes Mean Altered Provider Landscape
Excerpt: "Labeling the 403(b) space 'arguably the most dynamic retirement market sector,' a new report by two research firms predicts the pace of transition and turnover by 403(b) providers is likely to pick up in coming months. 'Retirement Market in Focus,' released by RG Wuelfing and Associates and Retirement Research Inc., notes that 'marginal providers' have already exited from the 403(b) custody business or at least the multivendor 403(b) space and anticipates that will increasingly be the case (see The New 403(b) Model: Exclusive versus Multiple Vendor Programs). In the next year or two, more providers will likely get out, outsource, or stay and acquire 403(b) competitors, the report asserts." (PLANSPONSOR.com; free registration required)
[Opinion] Comments of American Council of Life Insurers to IRS on Proposed 403(b) Prototype Document Program and Sample Languagef (PDF)
9 pages. Excerpt: "Plans that Contain a Vesting Schedule Should be Permitted to Participate in the Prototype Program; The Plan Document and Contract Should be Coordinated, Rather than the Plan Document Terms Overriding the Contract in Every Case; The Provisions for Verifying Execution of Adoption Agreement and Acknowledging Receipt of Plan Amendments Should be Modified; The Minimum Required Distribution Provisions in the Sample Language Should Be Modified; [more]." (American Council of Life Insurers)
[Opinion] SPARK Institute Comments on Proposed 403(b) Prototype Document Program and Model Language (PDF)
14 pages. Excerpt: "The SPARK Institute believes that the most significant revision that is necessary to expand the availability of the prototype program is to permit the use of a vesting schedule in the prototype plan." (SPARK Institute)
[Opinion] ASPPA Comments on Proposed 403(b) Prototype Document Program
13 pages. Excerpt: "[T]he proposed program should much more closely mirror the current M&P/volume submitter program. Accordingly, we believe that the ?403(b) prototype program needs significant modification from its proposed form. Such changes will assist practitioners (many of whom work in both the ?403(b) and ?401(a) plan markets) by having consistent procedures and requirements. This consistency will also help the Service staff in reviewing the ?403(b) plans since the requirements will be similar to the ?401(a) program. Although we appreciate the goal of keeping the ?403(b) program simple, the quest for simplicity under the draft revenue procedure will undermine the functionality of the program." (ASPPA (American Society of Pension Professionals and Actuaries))
[Opinion] American Benefits Council Comments on Proposed 403(b) Prototype Document Program (PDF)
3 pages. Excerpt: "The Council believes that some minor changes to the prototype program [proposed in IRS Announcement 2009-34] will make it much more effective and usable by its 403(b) plan sponsor members. . . . [T]he Council recommends a few changes below that would address a wider variety of common plan designs than would be permitted under the original proposal." (American Benefits Council)
[Guidance Overview] Bureau of Labor Statistics Data on Employee Access to 'Other Types of Benefits,' 1979-2008
Excerpt: "Table 3 also shows the percent of workers with access to 'other benefits' in 2008. . . . The benefits with the highest rate of worker access were work-related education assistance (50 percent) and employee assistance programs (42 percent). Among the benefits with lower access rates, 2 percent of workers in private industry had access to employer-provided personal computers for home use, and 3 percent of workers had access to employer provided child-care funds." (U.S. Bureau of Labor Statistics)
[Opinion] The Case For 'Distributed Custodial Accounts' from Terminated 403(b) Plans
Excerpt: "One of the biggest disappointments arising from the issuance of the 403(b) regs has been the inability of employers to effectively terminate their plans. . . . The draconian position taken by the IRS in drawing a distinction between an individually owned annuity and a custodial account is hard to understand. From a strictly statutory view, it seems to have little support." (Business of Benefits Blog)
[Opinion] The Case for 'Distributed Custodial Accounts' from Terminated 403(b) Plans
Excerpt: "The draconian position taken by the IRS in drawing a distinction between an individually owned annuity and a custodial account is hard to understand. From a strictly statutory view, it seems to have little support. The language of 403(b)(7) is unambiguous: 'for purposes of this tilte, amounts paid by an employer described in paragrph (1)(A) to a custodial account which satisfies the provisions of 401(f) shall be treated as amounts contributed by him for an annuity contract for his employee....'" (Giller & Calhoun, LLC)
[Guidance Overview] Proposed Regs Relating to Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
2 pages. Excerpt: "The proposed regulations apply to 401(k) plans (including those that have a Qualified Automatic Contribution Arrangement (QACA)) that provide for safe harbor nonelective contributions (3% of compensation) and 403(b) plans that provide for similar contributions." (Transamerica Center for Retirement Studies)
[Guidance Overview] Adjusting to the Brave New World of 403(b) for Plan Sponsors (PDF)
55 slides. Regulatory Compliance, Fiduciary Due Diligence, and Trends in the 403(b) Industry. (Morgan, Lewis & Bockius LLP)
[Guidance Overview] Proposed Regulations Permit Suspension of Safe Harbor Nonelective Contributions upon Substantial Business Hardship
Excerpt: "The proposed regulations apply to both traditional safe harbor nonelective contributions and safe harbor nonelective contributions under qualified automatic contribution arrangements. On May 15, 2009, the Internal Revenue Service (IRS) issued proposed regulations that permit sponsors of 401(k) and 403(b) safe harbor retirement plans that experience a substantial business hardship to suspend or reduce safe harbor nonelective contributions mid-plan-year rather than terminate their plans. The proposed rules parallel existing regulations that allow sponsors of safe harbor matching plans to suspend or reduce matching contributions as an alternative to terminating the plan." (McDermott Will & Emery)
[Official Guidance] Text of 'IRS Retirement News for Employers' -- Spring 2009 Edition (PDF)
14 pages. Excerpt: "The EP Team Audit (Large Case Program) web pages have been updated to include: EPTA Trends and Tips (now organized according to plan type): Common Trends Across All Plan Types; Multiemployer Plan Trends; 401(k) Plan Trends; Defined Benefit Plan Trends; 403(b) Tax-Sheltered Annuity Plan, 457 Plan and Governmental Plan Trends; 'EPTA Trends and Tips' includes links to videos on the EPTA program and on finding, fixing and avoiding plan errors; Internal Controls Questionnaire - Examples of questions asked by EP examiners to understand the system procedures and internal controls; Taxpayer Documentation Guide - This guide, developed by EPTA agents and outside practitioners, provides a comprehensive list of documents that need to be made available for examination." (Internal Revenue Service)
[Official Guidance] Text of IRS Employee Plans News: May 2009 Special Edition: Overview of Prop. Regs. on Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
2 pages. Excerpt: "The proposed regulations allow an employer that suffers a substantial business hardship to amend its plan to reduce or suspend the plan's safe harbor nonelective contributions if all the following requirements are satisfied: [1] the plan is amended prior to the end of the plan year to reduce or suspend the safe harbor nonelective contributions; [2] the plan as amended, provides that the ADP test (and ACP test if applicable to the plan) will be satisfied for the entire plan year in which the safe harbor nonelective contributions are reduced or suspended; [3] all eligible employees must be given a 'supplemental notice' that explains the reduction or suspension of future safe harbor nonelective contributions and its consequences, the procedures for changing employee elections and the effective date of the amendment . . . . [three more conditions not shown here -- ed.]" (Internal Revenue Service)
[Official Guidance] Text of IRS Proposed Regs: Suspension or Reduction of Safe Harbor Nonelective Contributions (PDF)
6 pages. Excerpt: "The proposed regulations would . . . permit an employer sponsoring a safe harbor plan . . . that incurs a substantial business hardship (comparable to a substantial business hardship described in section 412(c)) to reduce or suspend safe harbor nonelective contributions during a plan year. These proposed regulations would provide an employer an alternative to the option of terminating the employer's safe harbor plan in such a situation. The proposed regulations would allow for the reduction or suspension of safe harbor nonelective contributions under rules generally comparable to the provisions relating to the reduction or suspension of safe harbor matching contributions." (Internal Revenue Service)
[Guidance Overview] Proposed Rules Allowing Employers to Suspend or Reduce Safe Harbor Nonelective Contributions
Excerpt: "The IRS has come up with some new rules to 'ease the pain' of these dire economic conditions and has issued some proposed regulations allowing employers to reduce or suspend their 401(k) or 403(b) safe harbor nonelective contributions mid-year in the case of a 'substantial business hardship described in section 412(c) [of the Internal Revenue Code].' The IRS notes in the preamble to the proposed regulations (in today's Federal Register) that the new rules will 'provide an employer an alternative to the option of terminating the employer's safe harbor plan in such a situation.' There is a 30-day advance notice requirement and a requirement that employees be allowed to change their salary deferral elections in order to take advantage of the new rules." (Attorney B. Janell Grenier via Benefitsblog.com)
IRS Proposes Rules for Safe Harbor Match Cuts
Excerpt: "The Internal Revenue Service has proposed rules that would permit employers affected by substantial business hardship to decide mid-year to reduce or suspend non-elective contributions to safe harbor 401(k) and 403(b) plans." (PLANSPONSOR.com; free registration required)
[Opinion] 403(b) Sponsor Role in Participant Investment Education
Excerpt: "Now that the IRS final 403(b) regulations are generally effective, public school and 501(c)(3) organizations are more involved in the operation of their 403(b) plans. However, the role of a '403(b) sponsor' is still evolving, including whether an employer's new hands-on role translates to employee education and information about product vendors under their 403(b) plan." (PLANSPONSOR.com; free registration required)
[Opinion] ERISA Challenges for Non-ERISA 403(b) Plans
Excerpt: "Despite some helpful efforts by the DOL to provide guidance (e.g., Field Assistance Bulletin 2007-02), there are still significant obstacles for the employer that wants to maintain a non-ERISA 403(b) arrangement. Under the 403(b) regulations, the employer is responsible to make certain that the program remains in compliance with the tax rules, but its efforts to meet this responsibility can then cause it to fall out of the DOL safe harbor. [Originally posted March 9, 2009.]" (Giller & Calhoun, LLC)
[Guidance Overview] Final Guidance on Automatic Enrollment Plan Designs (PDF)
7 pages. Excerpt: "These developments affect sponsors of 401(k) plans, 403(b) plans, and governmental section 457(b) plans. Background and summary: The Pension Protection Act of 2006 (PPA) included provisions to encourage sponsors of 401(k) plans, 403(b) plans, and governmental section 457(b) plans to adopt automatic enrollment plan designs. These provisions included the creation of: Eligible Automatic Contribution Arrangements (EACAs), to permit the penalty-free distribution of 'accidental' automatic deferrals and provide a six-month period to distribute excess contributions and excess aggregate contributions without imposition of the 10% excise tax; and Qualified Automatic Contribution Arrangements (QACAs), to provide a safe harbor plan design that exempts plans from certain nondiscrimination tests." (Prudential Retirement)
Creative Communications for 403(b) Plans
Excerpt: "Plan sponsors can leverage the Web and their providers to create useful communication strategies for 403(b) participants, according to panelists at PLANSPONSOR's 403(b) Summit. . . . There are two types of communication strategies 403(b) sponsors utilize: required and non-required." (PLANSPONSOR.com; free registration required)
[Guidance Overview] Clarifications, Frustrations, and Operations of the Final 403(b) Regulations (PDF)
4 pages. (Milliman)
Determining the Best Investment Choices for 403(b) Plans
Excerpt: "While compliance efforts have led some 403(b) plan sponsors to adjust their investment menu, others have moved forward with existing offerings. There are a number of things plan sponsors should consider when deciding what to do about investments. Speaking at PLANSPONSOR's 2nd annual 403(b) Summit in Orlando, Florida, Phillip Senderowitz, Chief Investment Officer, Chepenik Financial, said that in setting the investment lineup for their plans, sponsors should consider the participants - their range of investment knowledge, risk tolerance, and desire for involvement." (PLANSPONSOR.com; free registration required)
IRS Draft Procedures for Obtaining Opinion Letters for Prototype 403(b) Plans
Excerpt: "The IRS has also posted proposed sample plan language for drafting 403(b) prototype plans on its website. Comments are requested about the draft revenue procedure and sample plan language, and about any other aspect of the 403(b) prototype plan program in general." (Wolters Kluwer)
More 403(b) Guidance on the Way, Key IRS Official Says
Excerpt: "The IRS's Employee Plans (EP) unit will issue more guidance on how to satisfy the requirements for 403(b) plans, EP Tax Law Specialist Robert Architect stated on April 16, 2009 in an IRS phone forum. The IRS will update the EPCRS program to address 403(b) plans, Architect said. The revisions will be issued in the 'near term,' he indicated. Initially, the revised procedures will allow plans to correct operational failures." (Wolters Kluwer)
403(b) Communication Takes on New Education Role
Excerpt: "Retirement plan advisers have an opportunity to help 403(b) plan sponsors reach out to participants in a variety of ways. As many 403(b) plans move to consolidate to a single-vendor platform, the role of education and, therefore, communication is shifting. In the past, education was between vendors as they tried to win over employees, and now it is more about the plan sponsor and the employees . . . . 'Now these education meetings are not a sales pitch,' . . . . The trend of consolidation has provided an opportunity to focus on new education endeavors in 403(b) plans, such as asset allocation . . . ." (planadvisor)
[Guidance Overview] Prototype 403(b) Plans
Excerpt: "As expected, the IRS recently announced that it will be establishing a prototype program for 403(b) plans (IRS Announcement 2009-34). The Announcement also includes a draft Revenue Procedure setting forth the parameters of the 403(b) prototype program. The IRS is soliciting public input before finalizing the procedure [and the Listing of Required Modifications (LRMs) that were released in conjunction with the Announcement.]" (SunGard)
One in Five Companies Have Now Reduced 401(k) or 403(b) Matches, According to Survey
Excerpt: "Some 22 percent of companies report they have recently reduced their contributions to employee 401(k) or 403(b) accounts, up from 12 percent in February and just 2 percent in October 2008, according to a Watson Wyatt survey of 141 employers conducted this month. Another 8 percent of employers expect to slim their match in the next 12 months. And 4 percent of the companies surveyed that already trimmed their match plan to further cut employer contributions this year." (U.S. News & World Report)
New 403(b) Market Statistics Available
Excerpt: "The [one-page] chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year." (403bwise)
[Guidance Overview] IRS's Proposed Prototype Program for 403(b) Plans
Excerpt: "Those sponsors not electing to adopt a 403(b) prototype plan or that are otherwise unable to do so because of a complex plan design or for other reasons should continue to ensure compliance with the final 403(b) regulations, and should continue to monitor guidance from the IRS to determine whether the IRS intends to approve 403(b) plans via a program similar to the determination letter program in place for 401(k) plans. Announcement 2009-34 reiterates the IRS's intent to establish a determination letter program for individually designed 403(b) plans, but, as with prior guidance, the Announcement does not specify a date as of which such program will be established." (McDermott Will & Emery)
NAGDCA 2009 Survey of Defined Contribution Plans
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators)
[Guidance Overview] IRS's Draft Prototype 403(b) Plan Language (PDF)
1 page. Excerpt: "The Internal Revenue Service has posted on its Web site draft sample language for ? 403(b) prototype plans. This is the latest step in the Service's announced process for assisting in the transition to the July 2007 final regulations under ? 403(b)." (Sutherland)
[Official Guidance] Text of IRS 'Employee Plans News' April 2009 Special Edition, Describing Proposed 403(b) Procedures (PDF)
2 pages. Excerpt: "This Special Edition contains the IRS's request for comments on drafts of a revenue procedure and sample plan language for ?403(b) prototype plans and highlights of the draft revenue procedure." (Internal Revenue Service)
IRS Seeking Public Comment on 403(b) Prototype Pre-Approval Program
Excerpt: "The IRS seeks public input before finalizing these procedures and sample plan language and invites interested persons to submit comments by June 1, 2009." (International Foundation of Employee Benefit Plans)
[Official Guidance] Text of Draft Document by IRS: 403(b) Plan Listing of Required Modifications and Information Package (LRM) (PDF)
67 pages. Excerpt: "The Section 403(b) Prototype Program will operate generally in the same manner as the current Master and Prototype Program for plans qualified under section 401(a) of the Internal Revenue Code. A Section 403(b) Prototype Plan sponsor will submit a section 403(b) plan document to the IRS for review. . . . The DRAFT sample language is based on language previously developed for other IRS prototype plan programs . . . ." (Internal Revenue Service)
[Official Guidance] Text of IRS Announcement 2009-34: Draft of 403(b) Prototype Document Procedure (PDF)
25 pages. Excerpt: "This announcement includes a draft revenue procedure that contains the Service's proposed procedures for issuing opinion letters as to the acceptability under ? 403(b) of the form of prototype plans. The Service is simultaneously posting draft sample plan language on the irs.gov website for use in drafting ? 403(b) prototype plans. The Service seeks public input before finalizing these procedures and sample plan language, and invites interested persons to submit comments." (Internal Revenue Service)
[Guidance Overview] IRS Releases Proposed 403(b) Prototype Document Program
Excerpt: "[The Internal Revenue Service] unveiled the next step in the tax agency's efforts to move 403(b) plans closer to their 401(k) cousins. Robert J. Architect, IRS Senior Tax Law Specialist, [said] that the tax agency considers issuance of the draft revenue procedure and sample plan language supporting it to be significant steps in the evolution of 403(b) regulations. Determination letter reviews for the prototypes could begin as soon as the first quarter of 2010." (PLANSPONSOR.com; free registration required)
[Opinion] 403(b) Written Plan Considerations
Excerpt: "One of the most significant changes made to 403(b) plans in the final 403(b) regulations is the written plan requirement. . . . The final 403(b) regulations do not impose a specific formula for the written plan. To the contrary, they acknowledge that the requirement can be satisfied with a collection of documents, sometimes referred to as the 'paper clip' approach, a helpful alternative for many plans, such as public sector plans for which many provisions are contained in state statutes, regulations and administrative rules." (PLANSPONSOR.com; free registration required)
[Guidance Overview] Major Provisions of the Final 403(b) Regulations and Effect on Plans
Excerpt: "What Employers Should Do Now: Review 403(b) plan documents . . . . With respect to 'non-ERISA' plans, analyze the impact of the final regulations . . . . Review eligibility provisions and employer contribution data to ensure compliance with the 'universal availability' and nondiscrimination rules." (Littler Mendelson P.C.)
[Guidance Overview] 403(b) Plan Document Requirement: Eight Things Tax-Exempt Organizations and Public Schools Must Address
Excerpt: "Until this year, 403(b) plans that were ERISA plans nevertheless had only minimal financial reporting obligations on Form 5500. New Department of Labor regulations (independent of the new 403(b) tax regulations) effective for 2009 now impose on ERISA 403(b) plans the same reporting requirements applicable to (for instance) 401(k) plans. Notably, 403(b) plans with more than 100 participants must supply an audited financial statement as part of their filing. Form 5500 schedules themselves have been expanded to collect new and detailed information about plan arrangements with insurance companies and other service providers. These schedules may need to include information relating to annuity contracts held by former employees. Affected employers must engage an accountant for the plan, and ensure they have systems in place to obtain, track and report the required information." (Sonnenschein Nath & Rosenthal LLP)
[Opinion] The Lost Souls of 403(b): 2009 Form 5500, Participant Counts and the DOL
Excerpt: "One would hope that we could look to the IRS's Rev. Proc. 2007-71 for guidance, to glean some sort of sensible ERISA answer which would be consistent with the Code: perhaps if you don't need to track the participant's contract or account for tax compliance purposes, you wouldn't need to include it in plan counts for ERISA purposes. This, though, has its odd results: the inactive contracts issued prior to 2005 would all be excluded, and inclusion of those in the 2005-2009 'transition' period would depend upon whether they were for active or former employees and whether a good faith effort has failed. Given the difficulties and ambiguities surrounding the implementation of 2007-71, this Rev. Proc. will not provide a testable, objective standard which would pass an auditor's scrutiny." (Giller and Calhoun)
[Official Guidance] Spring 2009 Issue of IRS 'Employee Plan News'; Includes Update on ERPA Program (PDF)
Excerpt: "This edition contains the following articles: * Know a Nonamender? Here's what you need to know NOW... * Final Regulations Issued for Automatic Contribution Arrangements * Sample Plan Language - Transfer of an ESOP's S Corporation Shares to Prevent a Nonallocation Year * The EPCU Insider -The Multiemployer Actuarial Certification Project ? Defined Benefit Plan Actuarial Certification Errors * ERPA - CPE Sponsor Program * Web Spins - The Retirement Plans Site * Employee Plans Published Guidance * Critical Priorities?With Monika Templeman - Today's Discussion: Update on the Enrolled Retirement Plan Agent Program * Attention All 2009 Form 1099-R Issuers * Highlights of the Retirement News for Employers * The Corner of Forms & Pubs * We're Glad You Asked! * 403(b) Phone Forum * DOL Corner * PBGC Insights * Calendar of EP Benefits Conferences" (Internal Revenue Service)
[Opinion] The 403(b) Regs Unintended Consequence: The Freezing of Loans and Hardships in a Time of Crisis
Excerpt: "One of the most unfortunate and unintended consequences of the new 403(b) regulations is the freezing of hardship distributions and loans from contracts of 'deselected' vendors, at a time when these funds are needed the most. What at first seemed like an almost esoteric, academic discussion of what to do with contracts which were issued prior to 1/1/09 and to which all contributions ceased as of that date has now become one which is fraught with human tragedy. Participants in in 403(b) plans (and, it seems, mostly in non-ERISA plans like school districts) are now caught in a terrible cat-fight between employers and vendors which has resulted in employees not having access to those 403(b) funds to help them through this economic mess in which we find ourselves." (Giller and Calhoun)
[Guidance Overview] Worker, Retiree, and Employer Recovery Act Provision of Relief for Defined Contribution Plans (PDF)
4 pages. Excerpt: "This new law applies to sponsors of and participants in qualified defined benefit and defined contribution plans, including multiemployer plans, governmental plans, and church plans that do not elect to be covered by ERISA ('non-electing church plans'). It also applies to ERISA and Non-ERISA 403(b) plans and governmental section 457(b) plans." (Prudential Retirement)
[Opinion] The Case for a Single Vendor Approach in Higher Education 403(b) Plans
Excerpt: "With all of the confusion, complexity, and costs that will have to be absorbed by sponsors with multi vendor plans due to 403(b) regulation changes, there is a very strong argument for moving to a single provider model for higher education plans. However, the argument has mostly been made in discussions about new plan limit and monitoring requirements, and not much has been mentioned regarding requirements to perform plan audits and 5500 filings for plan years beginning after December 31, 2008. Bringing some insight and clarity on the issues surrounding 5500 filings and plan audits can only add support to why reducing the number of plan vendors (ideally to a single vendor) makes sense." (PLANSPONSOR.com; free registration required)
[Guidance Overview] 403(b) Plans Information Sharing Data Elements Questions & Answers (Last Updated - March 6, 2009)
Excerpt: "The SPARK Institute today announced that it has posted new answers to additional technical questions it has received regarding its 403(b) Plans Information Sharing Data Elements Best Practices. 'These new questions and answers supplement those that were posted on February 3, 2009,' said Larry H. Goldbrum, General Counsel of The SPARK Institute. The new questions and answers, along with previously answered questions and other materials related to the Best Practices, are on the Institute's web site at http://www.sparkinstitute.org/comments-and-materials.php. 'Anyone interested in information related to the Best Practices should check the web site regularly for answers to the latest questions and other updates,' Goldbrum said." (The Spark Institute)
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