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GUST, EGTRRA and Compliance issues for ERISA 403(b) Plan

Guest JVH

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A not for profit has an ERISA Plan that it froze a few years back and then started a NON-ERISA 403(b) with a different vendor. I'm trying to research a few issues and am not finding a lot:

1. The ERISA Plan document did not permit hardships, but in practice, the employer allowed 4 of them through the years. I noted in this topic's discussions below (Sept. 30, 2003), that 403(b) plans are required to be administered in accordance with the Code and Regs. (and ERISA), but not the plan document and that there are no prototype 403(b) plans. Do we need to be concerned with the fact that the 403(b) was not administered in compliance with the document, or should we just be concerned as to whether the hardship was OK under the Code?

2. Can the document be retroactively amended to the hardships? It has been 3 to 5 years since the hardships.

3. It seems to me that if the ERISA Plan and the NON-ERISA Plan were combined (which is proposed by a vendor), that the merged thing would be an ERISA Plan because old employer matches would be in the new, combined Plan. AGREE??? DISAGREE?

4. It looks like you can update the documents for GUST and EGTRRA whenever, as long as they are administered properly. AGREE or NOT?????

5. Can you ever terminate an ERISA 403(b) Plan that has employer match and employee deferrals in it? Is it possible to require the employer match to be distributed even though the person is still employed, and then either require, or try to convince the employees, to directly transfer the remaining salary deferral amounts to an NON-ERISA 403(b) plan?

Like everyone else, we have a gang of DC plans, and only one or two 403(b)'s, so finding this stuff is tough.

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