403 (b) Gust Updates

[Guest Frankie]

Does anyone know if 403(B) custodial agreements or plan docements need to be updated by the end of the GUST RAP ?

[Guest Tom Geer]

There is no such thing as a remedial amendmnet period for 403(B)'s, since the RAP applies only to qualfied plans. We are prioritizing 403(B)'s for GUST and EGTRRA to get the relevant language in place before it is applied. If that isn't done, there is the potential that the IRS will take the position that the 403(B) has not been administered in compliance with its terms, and is therefore not eligible for 403(B) treatment.

[k man]

in light of the previous post, if you are updating the plan, do you make the amendment retrocative to 1/1/97?

[mbozek]

There is no remedial amendment period for 403(B) plans which are only required to be administered in accordance with the law not with the terms of the plan. However, if you are amending a plan you should make each amendment retoactive back to its effective date, e.g., USERRA is dec 1994 in the remote case that the plan is audited (even though the IRS audit manual notes that the provisions are not determinative of compliance-- the agent is to review whether the plan complied with the law in operation).