403(b) has not been filing 5500s

[RayJJohnsonJr]

A 403(b) Plan installed by a 501©(3) in 2002 which is funded solely by employee deferrals and employer matches of 100% of pay up to 3% of pay and the matching has a 5 year graduated vesting schedule.

The Plan has never filed a 5500.

Should The Plan have filed 5500s since 2009?

If the match had been immidiately vested, would that have made a difference?

I would like to thank you in advance for your input?

Rene

[dcoderre]

For a 403b to be exempt from Title I of ERISA, it must either be a non-electing church plan, a governmental plan, or a plan with limited employer involvement. If the entity makes employer contributions, it fails the limited employer involvement test. Thus, if it's not a church or government sponsor, it most certainly should have filed 5500s. Some entities are both a 501©(3) and an instrumentality of a government (or a church organization), so you'll want to look into that possibility if you haven't already.

[RayJJohnsonJr]

Thank you, dcoderre. Is there a remedial program you would recommend for this Plan?

[dcoderre]

I suggest looking into the Delinquent Filer Voluntary Correction program described at http://www.dol.gov/ebsa/FAQs/faq_DFVC.html

If the plan is small (threshold generally = 100 participants) then non-profits get a big break in cost for multiple years. Good luck!

[RayJJohnsonJr]

Thank you, dcoderre. This info has been VERY helpful. We are contacting VALIC, it's possible the 5500 were thier responsibility. If not, the DFVC program for 501©(3)'s sounds like a good cost break.

[mbozek]

Thank you, dcoderre. This info has been VERY helpful. We are contacting VALIC, it's possible the 5500 were thier responsibility. If not, the DFVC program for 501©(3)'s sounds like a good cost break.

Why would Valic be responsible for filing the 5500? Was this requirement in their contract with the plan sponsor?

[RayJJohnsonJr]

I'm not sure, yet. The sponsor has a VALIC document and VALIC funding, so it leads me to believe they might have VALIC Plan Administration. Obviously, the plan sponsor did not know exactly what they were getting into with repect to filling requirements.