Patricia Neal Jensen

All good ideas. I usually argue (persuasively) that it makes no sense to not match catch-up. The match cap should limit the plan sponsor's financial exposure, if that is their concern.

I have seen auto-enrollment default numbers from 4% (and lower) to as high as 10%. I do not believe there is a maximum prescribed by IRS or DOL at this time. The plan sponsor would have to weigh the benefit of assisting employees saving for retirement with the possibility of irritating employees by setting that number "too" high. I think The Principal's own plan (401(k)) uses 8 or 10%. Also important with a 403(b) is universal availability. Employees are usually eligible to defer their own money immediately with the first payroll after hire. Look at your plan document, but I have seen a 30 day wait before implementation of auto enrollment in 403(b)'s and have experienced a vendor's refusal to implement auto-enrollment (they were mailing packets and considering other tasks involved) for a 403(b) because the timing on initial entry after hire was too tight for them to feel comfortable. It is, as with many of these things, critical to read the plan document and make sure it is followed or written correctly and in a manner that can be administered. Good luck! Patricia

Luke.... I would have to do more research on Preemption to be sure. Can ERISA preempt an action that is not specifically addressed (in ERISA)? I am usually involved in drafting documents and I would be reluctant to put that language in a plan document in California. Why "buy" trouble? Patricia

1. Check the plan document and see what it says 2. Check the laws in the relevant state. FTW has told me they are taking this option out of their document as there are too many states with conflicting laws (California)

Look at CFR Sec 1.411(d)-4 - 411(d)(6) protected benefits, A-1 (3)optional forms of benefit and the extensive examples in (b) optional forms of benefit. My reading says this is a 411(d)(6) protected benefit.

I agree cash or deferred. And in your example, it is 2023. So what this idea does is also to subject the "deferred" portion to the 402(g) limit and to testing (assuming this is 401(k)). Arguably, doesn't this turn what once was profit sharing into income for the Participant (hence the term CASH or deferred). There is no provision in most documents for an amount that was contributed by the sponsor as Profit sharing to be converted into deferral, so the process of choosing has to take place prior to the PS contribution being made. Hasn't the sponsor just given everyone a 6% raise in your example? In my experience, the plan sponsor does not really understand how this works. Plan Sponsors mean well with this idea, but it can be challenging to administer.

Have never seen this set up as an "if not this, then this" arrangement. I suspect the payment from Participant accounts is hardwired in the admin system. What does the plan document say? In the Relius document, Article 3 Plan Contributions, Sec. 30 "Forfeiture Allocation Method," Box (f) should be checked if the plan is to direct use of the forfeitures to pay plan expenses. If Box (f) is checked and they are not doing this, then you have another problem.

Greetings, Friend! We (FuturePlan) use Relius corporately and I am on a call this afternoon regarding his among other things. I will let you know if I hear anything different than Belgrath's post. Patricia

Peter Gulia is correct and that is good advice. In response to the other comments: 403(b) plans are very useful and appropriate in many situations. Many "modern" 403(b)'s are invested in mutual funds not insurance contracts. Non-Profits would not benefit from the imposition of deferral testing mandated for 401(k) plans. Most 401(k) plans sponsored by Churches lack pre-approved plan documents and some are subject to current litigation. If one is knowledgeable about 401(k), best to stick to what you know.

I agree with the comments above. The "unique contract numbers" are probably individual annuity contracts. I would say whoever wrote that on the "audited financial statement" was not precise in naming these contracts. PNJ

Well done, Peter!

Agree regarding present Relius and FTW documents, but I would note a caution concerning state law. California is not among that states that explicitly permit this and FTW has noted that they will be removing any automatic application when the docs are restated. There is, of course, litigation on ERISA pre-emption concerning this, but the results are messy and all over the place. (Good article with case summaries is at familylawyermagazine.com/articles/change-beneficiary-designations-after-divorce updated January 2021). There are 23 states which have laws explicitly permitting this, but many of these cases and/ or laws concern life insurance, so again, caution regarding reliance. The TPA firm where I work is in California and so are almost all of our client plan sponsors. I advise plan sponsors not to rely on this. Litigation is no one's friend (unless you are a trial lawyer!)

Looked up SIMPLE documents furnished by IRS and they say "calendar year" in every reference to contributions. IRS.gov...5304 - SIMPLE.

Am emailing a confidential reply.. Patricia Neal Jensen, JD, VP Nonprofit Plans FuturePlan Patricia.Jensen@FuturePlan.com

I agree with the above. Once distributed, the annuity contract prevails. The annuity contract would not have been distributed without a distribution event (plan termination). The annuity contract issuer now wants information or proof of another distribution event?? A letter to the insurance commissioner of the relevant state with a copy to the President of the insurance company should fix this.

RMD's deliver revenue to the "fisc." I do not think they will consider a waiver because it would hurt participant savings. My thoughts!

No. Once ERISA; always ERISA.

Filing Period for 403(b) pre-approved plans under Cycle 2 will commence May 2, 2022 and end May 1, 2023. This is talking about the vendor seeking pre-approval not about your individual 403(b) plan sponsor, however. The program cycle is intended to be 6 years like 401(k) and (a) so one might assume that sometime 6 years from March or June of 2020, this will be upon us again!

I am commenting on the assumption that the Church is actually the Plan Sponsor. I don't have enough information to evaluate that conclusion. Peter Gulia's comments are excellent. Rocknrolls2: The Roman Catholic Church has not, to my knowledge, made any 410(d) elections ("electing church"). I agree with bito'money: This contribution should have been and needs to be written into the document. b9's have to have plan documents. Nate S.: I don't think this is a "discrimination test" problem. These plans are ERISA (DOL) exempt. Such testing is DOL not IRS. The problem is that they are making a contribution which is not provided for in the plan document. That is an IRS issue and problem.

401Kology: You are correct. Be careful to distribute the 403(b) accounts within the 12 month period. Also correct that you cannot merge the plans under the current law. Employees must enroll in the 401(k) to start deferrals into that plan. Nothing about the 403(b) is "transferable" to the 401(k). Entirely different code sections.

FTWilliam is the provider I know that promptly produces amendments and makes them available to plans/ customers.

Dislike unless some mitigation is offered for a plan sponsor who "forgets" to implement the auto-enroll.

Good afternoon! This is quite common in 403(b). There is nothing preventing you from establishing a new plan etc., but it will mean that the client now has two sets of fees etc. and responsibilities. I understand your impatience with the problems this situation entails but they really need a TPA who can administer the entire plan with all of its investments. They also need to find out if the insurance company will unbundle this plan to permit the use of a TPA. It is possible to terminate the ins. co. 403(b) and wait 12 months to start another 403(b). I have never had a client willing to do this, but it may be the only way out. Other comments: Payroll deduction of loans is not necessarily seen as desirable by plan participants in this situation. In-plan Roth conversions are also not likely to be incentive enough to get a participant to move assets. Especially since in the situation you describe, these contracts are likely to have termination penalties etc. Good luck! Don't hesitate to ask if more questions or facts come up. Patricia Neal Jensen, JD, VP Nonprofit plan leader FuturePlan Ascensus patricia.jensen@futureplan.com

A Non-Electing Church sponsors a Money Purchase plan which needs to be restated for Cycle 3. We understand that there is a newly allowed type of pre-approved plan for this situation under IRS procedures but our current document provider is not offering one. I found some notes published by ASC on such a document but have not located anything else. Does anyone know of a document provider with a pre-approved plan document (exempt from the requirements of Title I) for a Money Purchase plan sponsored by a Non-Electing Church? Thank you! Patricia Neal Jensen patricia.jensen@futureplan.com

At the present time, it is Relius for the most part. Some plans may still be at FTW, but new plans at FuturePlan are on the Relius document. Ascensus bought 45 TPA firms and each of them may have had their own document preferences prior to the acquisition. Most changes are being made during restatement periods. Anything I can help you with? Patricia Neal Jensen, JD, VP FuturePlan National Documents Team Nonprofit Plan Leader