403(b) Plan Document

[HarleyBabe]

Did 403(b) plans have to be amended for PPA? This is a Non-Erisa B Plan. Our last amendment was 2009.

Thanks

[Carol V. Calhoun]

Surely the 2009 amendment should have taken care of the PPA changes?

Short answer is yes, PPA did make some changes to 403(b)s. Here's a link to a TIAA-CREF description of them.

And there have been other changes since then, e.g., compliance with the Windsor decision, rollover rules, and HEART Act rules.

Of course, this is all complicated by the fact that there is no determination letter program for individually designed 403(b) plans, and even the determination letter program for prototype plans was only established in 2013. However, it is now possible to make a VCP submission for a 403(b) plan. You might consider that in your situation.

[Flyboyjohn]

Respectfully disagree.

The 2009 403b document requirement only required a "good faith effort" and there was and is no way to ever obtain an IRS determination letter on the "good faith effort" document and any subsequent amendments.

The IRS is getting ready to approve prototype 403b documents and will provide a window (probably 2 years) to bring all 403b plans onto a pre-approved prototype document retroactively effective back to 2009 at which point the "good faith" documents disappear.

I think the VCP program is for 403b plans that haven't adopted the good faith document.

[Carol V. Calhoun]

"The IRS is getting ready to approve prototype 403b documents"? It already has approved quite a lot of them.

I would agree that if you made a good faith effort in 2009, and adopt a pre-approved plan on some date before the end of the to-be-announced remedial amendment period, you'll get retroactive relief. My concern here is whether a document adopted in 2009 which did not comply with the Pension Protection Act of 2006 can even be considered a "good faith effort."

[Belgarath]

Carol - you say the IRS has already approved quite a lot of them - have you heard something from the IRS, or sources close to the IRS? We've heard nothing about any approvals, status, expected approval date, etc...

Thanks.

[HarleyBabe]

My feeling as well. I have been waiting for the 2 year window. I was not under the impression that 403(b) plans had to be amended with PPA and were separate.

[HarleyBabe]

To further this question, I had to amend the 403(b) to allow for Inservice Distribs. When I did this, I had the Trustees sign. I'm being told the 403(b) doesn't have Trustees and that is incorrect. Thoughts? It is not an ERISA plan?

Also, the plan sponsor who signed the 2009 document is not longer there. When I changed it with current folks I called them Trustees, would the opinion be I need to change this?

[Kevin C]

While not official guidance, the following is on the IRS website.

www.irs.gov/retirement-plans/403b-pre-approved-plan-program-faqs-remedial-amendment-period

The employer’s adoption of a pre-approved 403(b) plan that has a favorable opinion of advisory letter automatically corrects any defects in its prior written 403(b) plan but not defects in any documents incorporated by reference in to the prior plan). Interim amendments are not required for a plan to be eligible for this remedial amendment period.

That matches information our document provider sent in a newsletter.in 2015.

[Carol V. Calhoun]

Carol - you say the IRS has already approved quite a lot of them - have you heard something from the IRS, or sources close to the IRS? We've heard nothing about any approvals, status, expected approval date, etc...

Thanks.

I actually linked to a list of those the IRS has approved in my post above.

And I agree that interim amendments are not required. My concern is with a plan adopted in 2009 which failed to take into consideration PPA (which was a 2006 statute). I'm not sure that even qualifies as a "good faith" document.

[Belgarath]

Hi Carol - the list you linked to shows ALL of them with a status of "not issued yet."

If the IRS had "approved" them, why wouldn't they announce it? Am I missing something? Thanks!

[Tom Poje]

in 4/2015 (over a year ago)
FT William had the following regarding their 403 b documents

We are excited to provide you with draft versions of our 403(b) defined contribution plan documents that we will be submitting to the IRS through its 403(b) plan pre-approved document program. The deadline to submit 403(b) plan documents to the IRS is April 30, 2015. Due to the late release of the List of Required Modifications (LRM) from the IRS just a few weeks ago, the IRS has informed us that we will be able to make changes to the documents during the IRS review process. LRM’s provide the IRS’s sample language for use in pre-approved prototype and volume submitter documents.

Knowing that changes can be made during the submission process, we ask that you review and comment on these documents and provide us your feedback to support@ftwilliam.com by May 15, 2015. We will review all comments and suggestions. We may not able to incorporate all suggestions, but they all will be considered. We look forward to your comments and suggestions on these documents; they are your documents and we want them to both suit your needs and be the best documents possible.

Please keep in mind that these are draft versions for IRS submission, and updated documents will not be available for use on the ftwilliam.com system until the end of the submission process, possibly another two or three years. While these documents are under review, you will not see these changes on the current ftwilliam.com 403(b) documents.

[Carol V. Calhoun]

Sorry, my mistake. IRS had linked to that page as a list of pre-approved providers, and I failed to notice that they were all listed as not yet approved.

[benefitz]

The IRS list of providers of pre-approved 403(b) plans has been updated, but some still show "not issued yet" - including most of the TIAA-CREF documents (the IRS list shows 6 out of 7 not issued yet). Does anyone know when the rest of the letters are expected to be issued? (Or has the IRS simply not updated its list yet? (The report has a 5/28/2017 run date.)) Also, does anyone know which TIAA-CREF document is the one shown on the list as having received its letter?

https://www.irs.gov/pub/irs-tege/preapproved_403b_plans_list.pdf