403(b) Plan (contributions frozen pre-2005)

[Guest Laura Goalen-Anderson]

Can anyone confirm whether 403(b) plans that ceased receiving contributions before 1/1/05 are totally exempt from the plan document requirement under the new regulations? I have found discussions mentioning this but I can't track down the authority. Thanks.

[J Simmons]

Under Treas Reg 1.403(b)-3(b)(3) is where plan document is discussed. It talks in terms of a 403b contract needing to be part of a plan in order for contributions to be excluded from the EE's taxable income. See Treas Reg 1.403(b)-3(a). Since these regulations do not take effect until 1/1/2009, it is logical then that only post-2008 contributions to a 403b contract require that it be subject to a 403b plan of an employer to be excluded.

Also check out Rev Proc 2007-71, section 8. It seems to exempt from any attempt to include 403b contracts as part of an ER's plan those 403b contracts that have not received new contributions since the end of 2004.

However, also look at section 3.01 as the first sentence seems to assume that an employer is required by the regulations to adopt a 403b plan.