Church 403(b) Retirement Income Accounts

[Guest Tom:]

Are all 403(b) church plans that meet the requirements to be a retirement income account (RIA) under Treas. Reg. Section 1.403(b)-9(a)(2)(i) considered to be RIA plans, or is the plan only an RIA if it designates itself as an RIA in a written plan document? The RIA written plan requirment in Treas. Reg. Section 1.403(b)-9(a)(2)(ii) uses the word "intent" which seems to indicate that the employer must elect to have its plan be an RIA plan. But, the definition of RIA and the exception from the written plan requirement in Treas. Reg Section 1.403(b)-3(b)(3)(iii) doesn't seem to leave any room for the empoyer to make an election. If a plan's RIA status is mandatory and not subject to an employer's election, it seems that all church 403(b) plans funded with variable annuities or custodial accounts are RAIs that must meet the written plan requirment. Can anyone point out a referrence to the contrary?

[TLGeer]

Are all 403(b) church plans that meet the requirements to be a retirement income account (RIA) under Treas. Reg. Section 1.403(b)-9(a)(2)(i) considered to be RIA plans, or is the plan only an RIA if it designates itself as an RIA in a written plan document? The RIA written plan requirment in Treas. Reg. Section 1.403(b)-9(a)(2)(ii) uses the word "intent" which seems to indicate that the employer must elect to have its plan be an RIA plan. But, the definition of RIA and the exception from the written plan requirement in Treas. Reg Section 1.403(b)-3(b)(3)(iii) doesn't seem to leave any room for the empoyer to make an election. If a plan's RIA status is mandatory and not subject to an employer's election, it seems that all church 403(b) plans funded with variable annuities or custodial accounts are RAIs that must meet the written plan requirment. Can anyone point out a referrence to the contrary?

Look at the structure of Regs. 1.403(b)-9(a). Subsection (2) is the definition of an RIA, and (2)(ii) is part of the definition. Subsections (3) through (7) are regulatory. The written plan requirement is in (2)(ii) and is part of the definition of RIA; i.e., unless a "program" is a written plan with an appropriate expression of intent it cannot have an RIA. So, if there is no written plan, there can be no designation of intent in the written plan, and therefore there is no RIA. Therefore, you get the circular result that absent a written plan (that states the intent to have an RIA) there is no requirement for a written plan.

Tom Geer

[Guest Tom:]

So RIA status appears to be strictly voluntary under the final regulations. In other words, a 403(b) church plan will never be an RIA unless the employer designates the plan as an RIA in the plan's written document.

[TLGeer]

So RIA status appears to be strictly voluntary under the final regulations. In other words, a 403(b) church plan will never be an RIA unless the employer designates the plan as an RIA in the plan's written document.

Yep.