Governmental 403(b)

[Guest ResearchGirl]

We recently took over the administration of a small governmental 403(b) -- deferrals and nonelective contribs -- and the prior TPA filed full 5500s for the plan -- 5500 + Schedules A thru SSA. Any advice on how to stop w/o raising any red flags?

[saabraa]

We recently took over the administration of a small governmental 403(b) -- deferrals and nonelective contribs -- and the prior TPA filed full 5500s for the plan -- 5500 + Schedules A thru SSA. Any advice on how to stop w/o raising any red flags?

Musings------------

1. File a return with the indication "final return" in Part I. Fill it out as a 403(b) return, ie only items 1-5 and 8 get filled out. But I see a possible problem with this. The DOL and/or IRS may communicate back regarding 1 or more glitches arising from the switch to the abbreviated reporting, though I can't think of any examples. I wouldn't do a final return with all the schedules. The minimum problems I see with that is having to indicate 0 participants at item 7 and 0 assets on the financial schedule.

2. Alternatively, write to both DOL in Lawrence, KS and to IRS Service Center Entity Unit in Ogen, UT. Ask them to delete the filing requirement that arose with the unnecessary prior filings. I wouldn't call this a red flag, though it obviously is drawing attention to the situation. If you go this route, I would follow up in a few months by phoning each agency to confirm they're showing a return is no longer necessary.

Other than that, I'm thinking the business of opting out of certain government or church plan exemptions via the 5500 filing (see Form 5500 prior to 1999) or a determination letter indication is inapplicable to 403(b)s, or maybe even inapplicable to government plans altogether. In other words, I don't think a filing obligation was established via the act of filing 5500's previously.

[Just Me]

Just stop. Governmental entities have no 5500 filing requirement for any plan any more. You will probably get a letter from the DOL asking why you stopped and you can answer it honestly.