403b plan consolidation

[Guest GinaD]

We currently have a 403b plan that has assets with the same investment provider but on 2 different platforms. One platform is an older 403b platform where contracts were set-up individually for the participants. The newer platform falls under the guidelines of ERISA and is held at the plan level with Employer involvement. Previously the old platform required a participant signature for any and all transactions within the plan.

A new investment advisor has been assigned to the plan and told the investment provider that all assets are ERISA assets and the plan document should override any restrictions of the individual contracts. The investment provider has agreed to the following actions.

1. Any account that has not had any contribution made to their account since 1/1/09 will be given notice and if no response, they will be treated like abandoned plans. The money will stay in their individual account but no longer are an asset of the plan.

2. Any account that has contributions made to it after 1/1/09 will be given notice and if no response is received then one of the following scenarios will occur.

- If the account balance is under the plan’s $5,000 deminimus threshold, they participant will be forced out of the plan accordingly.

- If the account balance is over $5,000, they will be transferred to the new investment platform.

Are 403b plans required to include assets on their 5500 if the accounts were set-up prior to 1/1/09 and have been frozen since 1/1/09? Does the IRS approve treating the individual contracts as abandoned plans and excluding them from being reported on the 5500? I assume I will show this as a distribution on my 5500, correct?

[Guest Chris M]

The IRS issued a Field Assistance Bulletin (FAB) that described Form 5500 reporting relief for certain accounts.