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Requirements is 403(b) is "recordkept"


Guest bcichon

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Guest bcichon

I am working with a hospital who wishes to establish a 401(k) and 403(b). They want a consolidated front-end for their employees for servicing of the two plans. The only way to accommodate this is to put the 403(b) on the recordkeeping platform. Currently they have a non-ERISA, individual contract based 403(b). If the plan is put onto a recordkeeping system and more importantly fixed menu is put into place (there is no match in the 403) it is my understanding that it now becomes an ERISA based plan. Let me know if this is correct.

Also, what other considerations do I need to be aware of other than the hospital will be required to:

- have a plan document (anyone know of 403B doc providers?)

- File Form 5500 Annually

- audit the plan annually

Thanks in advance. Bryan

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I do not remember ever feeling so confused after reading any post on any subject.

What do you mean by:

-- "consolidated front-end "

-- "servicing of the two plans"

-- "the recordkeeping platform"

-- "fixed menu is put into place "

Although your current 403(b) is "non-ERISA, individual contract based " you still have to have a recordkeeping system of some sort if only your payroll and salary reduction remittance records. Because its individual contract based you would have no other information, so what would you keep in this perceived "additional" recordkeeping system?

Bear in mind that being "individual contract based" is not what determines whether your 403(b) is ERISA or not.

What is there to put on a "front end? What sort of servicing are you contemplating that an employer could do in an individual based plan?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Corbel has a 403(b) document and supporting forms. I believe the cost is about $500 and you do the data entry on line with a password and can edit your document. The prior posts raises good questions. Good luck and your client should retain ERISA counsel if they have not done so already.

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  • 1 month later...
Guest justbe

What about the audit requirement? I thought 403(b) plans are not required to have an audit (even with over 100 participants)?

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