403(b) and SAR's

[Guest planadmin98]

Is an ERISA 403(b) plan required to prepare a Summary Annual Report? Since the Summary Annual Report summarizes the Form 5500, and the Form 5500 for a 403(b) plan does not include any financial schedules, what exactly would a Summary Annual Report summarize for the participants?

Also, does an ERISA 403(b) require a named Trustee to the plan document?

[Guest jdw]

403(b) sponsors are either public educational organizations or church plans that are exempt from ERISA.

If sponsor is a non-church 501©(3) entity, the plan may be subject to ERISA if it meets the ERISA definition of "employee pension benefit plan." A 403(b) plan funded solely with employee salary reduction contributions that has entirely voluntary participation, gives the participant all enforcement rights under the annuity or cusodial contract, limits employer involvement, etc. can avoid ERISA.

If the 403(b) is not subject to ERISA, it does not need a SAR. If it is subject to ERISA (e.g., employer makes contributions), it needs one.

There is no need for a trustee since there is no trust.

I have not read the new proposed regs to see if they say anything helpful.

[Lori Friedman]

I don't know if this issue is addressed anywhere in the 100+ pages of the new proposed regulations. Here's the answer as of 11/14/04:

403(b) arrangements that are subject to ERISA are required to file a Form 5500 and provide each participant with an annual SAR. Non-ERISA 403(b) arrangements are exempt from both requirements.

Just as an ERISA 403(b) has limited reporting requirements for Form 5500 (Part I and Part II, Lines 1-5 and 8, no schedules), it also prepares a pared-down version of the SAR. You don't fill in the blanks about plan revenue, expenses, assets, or liabilities; these numbers come from Form 5500, Schedule H or I, and a 403(b) plan doesn't report such information. Instead, you simply describe the plan and its annuity contract and/or custodial account funding arrangements.

You can find lots of examples of 403(b) plan SARs posted on the internet.

[rlb64]

Lori,

I can't find a sample 403(b) SAR. Can you help me find one on the internet?

These plans have only mutual funds and it looks like the only information left is a notice to employees that they have a right to view a meaningless 5500.