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403(b) Plan Document Issues


Guest John Nelson
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Guest John Nelson

Some 403(B) vendors purport (apparently) to have a "prototype" 403(B) plan document that they will make available at no charge (or nominal charge) to employers. My understanding, however, is that there is no such thing as a "prototype" plan in the sense that the plan document has been approved by the IRS and has an IRS letter that adopting employers can rely on, similar to a qualified 401(a)-type plan. Am I missing something here?? Are these "prototype" 403(B) documents really nothing more than sample documents that employers can use in writing their own plan? Thanks for your help.

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Guest CVCalhoun

Well, it depends on what you mean by a prototype. The IRS National Office will issue rulings on section 403(B) annuities. However, those rulings basically cover the form of the annuity contract, as opposed to other issues such as the amount of the maximum exclusion allowance or whether the coverage of the plan meets the nondiscrimination rules. A long time ago, I got what I believe are still the only rulings on a formula for determining the maximum exclusion allowance--and since it took about 5 years to get those rulings, I can understand why others have not followed my example. smile.gif

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