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News Items, by Subject

403(b) plans

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Dealing with the Legacy of the 403(b) 'Money Purchase' Plan
"It is a very common practice in the 403(b) market for an employer to specifically identify the percentage of compensation it will deposit as an employer contribution to their 403(b) plan ... It has been typical for 401(a) plan sponsors to treat plans with set percentage of compensation as 'Money Purchase Plans' ... But does this rule apply to 403(b) plans? This is not an esoteric issue. If you truly believe that your 403(b) plan is a 'money purchase plan' several things happen." (Business of Benefits)
[Opinion] Giving 403(b) a Bad Name
"[T]he public K-12 403(b) market is a mess; the polar opposite from the rest of 403(b)s. High fees, too many recordkeepers, and far too many investments are the norm for these plans.... [T]he school districts are generally small and have no staff allocated to providing proper oversight to their 403(b) or any other voluntary benefits. For the most part, these 403(b) plans are voluntary and supplemental to a state retirement system that is in place, so they are quite low on the totem pole in terms of allocated resources." (Cammack Retirement Group)
Best Practices for Plan Sponsors, Part 9
"As with the Anthem case, the Vanderbilt settlement teaches fiduciaries that they need to pay attention to the share classes of the mutual funds they include in their plans, including private sector 403(b) plans. A committee should devote at least part of one meeting a year to a report by its investment advisor on the share classes of their plan's investments and the share classes that are available to the plan. This is a high risk area and should be treated accordingly, that is, with close attention and care." (
Sweeping 403(b) Changes in Portman-Cardin Legislation Leave Unanswered Questions
"The Portman-Cardin Bill, the Retirement Security and Savings Act of 2019, introduces sweeping changes to 403(b) plans by expanding their investment universe. These changes, however, also required modification to the Securities Laws otherwise applicable to 403(b) plans in order for them to work.... A few things are conspicuously absent from the statute ... Who is the shareholder? ... Unitization under 403(b).... Distributed annuities." (Business of Benefits)
Changing Your 403(b) TPA
"Problems may arise when employers change their plan's TPA and do not notify the product providers, the plan participants or the former TPA. In the absence of such notification, all parties continue to interact with the former TPA, but plan transactions are not processed or approved. Delays occur, contributions are not processed, information is not provided and a logjam develops.... [This article describes] general recommendations based on successful transitions that have been made in the 403(b) marketplace[.]" (National Tax-Deferred Savings Association [NTSA])
Third Circuit Resuscitates Claims Against University 403(b) Plan Fiduciaries
"The Third Circuit ... rejected the University's argument that the Court's earlier decision in Renfro v. Unisys Corp.... insulated plan fiduciaries from liability for a breach of fiduciary duty where plans offer a mix and range of investment options, because such a ruling would allow a fiduciary to avoid liability by stocking a plan with hundreds of options even if the majority were overpriced or underperforming. Furthermore, it would hinder courts from evaluating fiduciaries' performance against contemporary industry practices because practices change over time and ERISA fiduciaries have a duty to act prudently according to current practices." [Sweda v. Univ. of Penn., No. 17-3244 (3d Cir. May 2, 2019)] (Proskauer)
Why Do Employees Cash Out Their 401(k)/403(b) When They Leave?
"[T]aking a withdrawal should be as easy as internet shopping. Whether it is via chat, telephone, messaging, etc., there should be a big flashing warning to participants considering this option: 'Do You Know There Are a Lot of Tax/Wealth Accumulation Consequences to This Withdrawal? Are You Certain You Wish to Proceed?' Otherwise, individuals who move from job to job have ample opportunity to cripple their retirement at each step along the way." (Cammack Retirement Group)
Part-timers Improperly Excluded from Your 403(b) Plan? There's Still Time to Correct That!
"Employers that were not aware that employees once eligible to participate in a 403(b) plan must always be eligible, regardless of their current status as part-time employees, now have the chance to fix their plan and operations without penalty and without retroactive contributions. The fix applies generally to operations beginning with 2019 and to plan amendments made by March 31, 2020." (Buck)
One Year to Go Until the 403(b) Restatement Deadline
"Not-for-profit organizations have an opportunity during the restatement period to align their retirement plan procedures with their written plan documents to help ensure that their retirement plans are following best practices. Changes may need to be made to the operations of the plan, the provisions in the plan documents or both." (CBIZ)
Specialized Types of Retirement Income Plans: Recent Developments (PDF)
12 pages; ABA EBC 2019 Midwinter Meeting Report. Outline of statutory and regulatory developments for ESOPs, 401(k) plans, IRAs, and Section 457 plans. (Employee Benefits Committee [EBC], American Bar Association)
Recent Cases on Multiemployer Plan Withdrawal Liability (PDF)
29 pages; ABA EBC 2019 Midwinter Meeting Report. Outline of recent litigation involving multiemployer plans. (Employee Benefits Committee [EBC], American Bar Association)
Tax Treatment of Welfare Benefits for Employees and Beneficiaries (PDF)
7 pages; ABA EBC 2019 Midwinter Meeting Report. Outline of tax consequences for employees of various welfare benefits, including recent statutory and regulatory developments for transportation fringe benefits, and reporting of health care benefits. (Employee Benefits Committee [EBC], American Bar Association)
Regulation of Employee Health Care Benefit Plans (PDF)
8 pages; ABA EBC 2019 Midwinter Meeting Report. Outline of statutory and regulatory issues affecting health care benefit plans; includes brief summary of recent litigation (Employee Benefits Committee [EBC], American Bar Association)
Liability Issues Unique to Welfare Plans (PDF)
42 pages; ABA EBC 2019 Midwinter Meeting Report. Detailed decsriptive outline of recent litigation involving welfare benefit plans. (Employee Benefits Committee [EBC], American Bar Association)
Benefit Claims: Alternatives to Litigation (PDF)
16 presentation slides, from ABA EBC 2019 Midwinter Meeting. Topics: [1] Pre-suit settlement negotiations; [2] Media coverage; [3] External review; and [4] Request for review strategies. (Employee Benefits Committee [EBC], American Bar Association)
Engagement Letters for Employee Benefits Attorneys (PDF)
7-page presentation outline, from ABA EBC 2019 Midwinter Meeting."An initial issue ... is whether employee benefit plans are an independent legal person, different than the plan sponsor. On this issue, the law is not only obtuse, but the federal circuits have conflicting lines of authority.... For pension plans, is the plan sponsor or the plan administrator, if different entities, the proper party to act for the plan? ... For fully insured welfare benefit plans, is the insurer also the plan and thus the proper party? For engagement letters, this issue can often be finessed by an arrangement that does not resolve it but makes it not relevant." (Employee Benefits Committee [EBC], American Bar Association)
Defined Contribution Plan Fee and Investment Litigation (PDF)
34 presentation slides, from ABA EBC 2019 Midwinter Meeting. Topics: [1] 401(k) and 403(b) fee litigation; and [2] Fiduciary risk on alternative investments. (Employee Benefits Committee [EBC], American Bar Association)
Emerging Trends in 401(k) and 403(b) Fund Menus
"The power of the 'default effect' in automatic enrollment plans has made target date funds (TDFs) the dominant investment choice for retirement savers.... [Y]ounger participants are proving to be the most powerful advocates for these types of solutions.... [T]he starting point and single most important investment decision for this generation of retirement plan fiduciaries revolve around the target date decision. But first, let's take a step back and briefly discuss the strategic outcomes fiduciaries should be focused on when designing a fund lineup for their plan." (Greenspring Advisors)
Understanding the Importance of Recent 403(b) ERISA Settlements
"[T]aken together, these settlements highlight the peculiar staying power of 403(b) ERISA cases even in uncharted waters.... If the 403(b) excessive fee litigation continues along a trajectory similar to its 401(k) predecessors, then we can expect the recent 403(b) settlements to usher in a new volley of suits brought against institutions overseeing slightly smaller retirement plans than the billion-dollar-plus plans at issue in the first wave of 403(b) cases." (Thompson Coburn)
403(b) Retirement Plan Fee Litigation: An Update
"While each lawsuit makes claims based on the particular facts and circumstances of the plan in question, there are some common themes that have emerged ... [P]lan sponsors should understand the issues being raised and keep track of the litigation, in order to manage risk. [A chart provides] a status update on each of the 403(b) lawsuits." (Cammack Retirement Group)
Brown University Settles 403(b) Fiduciary Class Action Suit for $3.5 Million
"Brown University, Providence, R.I., settled a class-action lawsuit alleging the university's 403(b) plans' managers breached their fiduciary duties under ERISA by offering too many similar investment options and paying excessive fees for investments." (Pensions & Investments)
403(b) Plan Remedial Period Closing Less Than Year from Now
"While the March 31, 2020 deadline may seem far off, the correction process requires significant time. Since amendments to the plan document must be retroactive to January 1, 2010 (or the plan's effective date, if later), a review must be done to evaluate both [1] all amendments made to the plan since that date, and [2] whether the plan has in fact been administered consistently with the plan document since that date." (Sheppard Mullin)
Time to Review 403(b) Plans for Compliance with IRS Requirements
"The IRS has established a pre-approved plan program under which a plan sponsor has until March 31, 2020, to retroactively adopt a plan document which the IRS has already opined complies with the requirements of Internal Revenue Code section 403(b). A plan sponsor should analyze whether a pre-approved plan document works administratively and structurally with its objectives. The IRS has indicated that it does not intend to establish a determination letter program for individually designed section 403(b) plans." (Miller Canfield)
2019 Compliance Checklist for Non-ERISA Plans (PDF)
"The Compliance Checklist incorporates requirements for governmental and nonelecting church plans, non-ERISA 403(b) plans, 457 plans and nonqualified executive benefit plans, and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made." (Prudential)
2019 Compliance Checklist for Plans Subject to ERISA (PDF)
44 pages. "The Compliance Checklist incorporates defined benefit (DB), defined contribution (DC) and ERISA 403(b) requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made." (Prudential)
Why Borrowing from a Retirement Plan to Pay Off Debt Is a Bad Idea
"Borrowing more doesn't address the issue of how the debt was acquired in the first place.... Some retirement plans require immediate repayment of loans if you change jobs, or else the entire loan is offset against your retirement plan account balance.... [B]orrowing from a retirement plan will ultimately reduce your income in retirement. The earlier in your working career you borrow, the greater the impact; due to the time-value of money." (Cammack Retirement Group)
The First Circuit's Putnam Decision: Where Does ERISA 401(k)/403(b) Litigation Go Now?
"The First Circuit's decision was ... well-reasoned and well-written. While the decision itself was important, perhaps the most memorable aspect of the decision was the First Circuit's admonition to 401(k) and, by implication, 403(b) ERISA plans and plan sponsors ... The First Circuit's statement raises a number of questions for ERISA 401(k)/403(b) excessive fees/breach of fiduciary duty litigation going forward." [Brotherston v. Putnam Investments, LLC, No. 17-1711 (1st Cir. Oct. 15, 2018)] (The Prudent Investment Fiduciary Rules)
Hardship Distributions and Recent IRS Changes
"Under the new rules, a plan sponsor can accept a written statement from the participant where they certify there is a financial need.... [Other changes include:] [1] No plan loan requirement -- although [this change] is not mandatory ... [2] Allow for further contributions ... This mandatory rule is effective January 1, 2020 but can be applied earlier. [3] Investment earnings distribution ... 403(b) plans still prohibit investment earnings to be counted for hardship withdrawals." (PlanPILOT)
403(b) Plan Participants Drop ERISA Lawsuit Against Long Island University
"Participants in a 403(b) plan run by Long Island University have dropped their ERISA lawsuit after having accused plan manager of having allowed excessive fees.... The record keeper, TIAA-CREF, was not named as a defendant." [Mulligan v. Long Island Univ., No. 18-2885 (E.D.N.Y. Feb. 8, 2019)] (Pensions & Investments)
Annual Plan Deadlines for the Plan Year Ending December 31, 2019 (PDF)
"[This] chart provides an explanation of key plan events and the deadline for each for Section 401(a) and 401(k) defined contribution plans with a plan year ending December 31, 2019. Off-calendar year plans should adjust the deadlines accordingly based on the time frames described in the chart." (VOYA Financial)
2019 Annual Plan Deadlines by Event (PDF)
10 pages. "[This] chart includes the key annual events which must occur within a specific deadline. The chart is intended to serve as a tool that can be used by employers to monitor compliance over the plan and calendar year." (VOYA Financial)
[Guidance Overview] IRS 401(k) Plan Fix-It Guide: Hardship Distributions Were Not Made Properly
Feb. 11, 2019. "How to avoid the mistake: [1] Review the plan document language ... [2] When you amend your plan document, make certain the language for hardship distributions is in the most recent document. [3] Establish hardship distribution procedures ... [4] Only allow hardship distributions that meet the plan document and IRC Section 401(k) requirements. [5] Look for signs that the hardship distribution program is being abused or badly managed." (Internal Revenue Service [IRS])
[Opinion] NTSA and the Swimming Pool Dilemma
"Recently, the National Tax-Deferred Savings Association [NTSA] released a report titled Improving Retirement Savings for America's Public Educators in which it aims to provide evidence that increasing or maintaining (many) choices for public educators increases participation.... The main conclusion was that 'The data shows a decrease in the participation rates for 403(b) plans when the number of choices are reduced.' If true, this report would be evidence that Nobel winning research on behavioral finance is wrong. However, it's not true. The data doesn't confirm the claims[.]" (The Teacher's Advocate)
Georgetown Win in 403(b) Investment Suit May Help Other Schools
"The court acknowledged that because the backgrounds and structures of 403(b) and 401(k) plans are different, the application of ERISA's fiduciary standards should also be different.... This was a departure from the view of other courts addressing the university lawsuits thus far, most of which have not delved deeply into differences between the two types of plans. As the cases move to the appellate courts, the universities may rely on this minority view to argue that the differences matter." (Groom Law Group, via Bloomberg BNA)
[Opinion] 403(b) Results Aren't Adding Up
"The secret sauce of a truly great 403(b) plan is a low fixed costs pricing structure which results in greater compounding of wealth than the products in many 403(b) plans that feature high asset-based costs. It's critical for school districts to understand how much high -- and ongoing -- asset-based costs can erode savings in a 403(b) plan over an educator's career." (W. Scott Simon, in Morningstar; free registration may be required)
Assessing Likely Impacts of IRS Hardship Withdrawal Rule Changes
"New rules established by Congress and the IRS simplify the process for participants to request a hardship withdrawal of DC plan assets; some experts say this could increase 'leakage,' while others anticipate more positive effects, such as lower debt among cash-strapped participants." (planadviser)
Evaluating Judicial Dismissals of 401(k)/403(b) Fiduciary Breach Actions
"In one recent decision, the court dismissed an ERISA action based the disallowance of the plaintiff's use of Vanguard for benchmarking purposes.... A common rationale given by the courts for dismissing ERISA actions is the number of investment options offered by a plan.... Several courts have recently dismissed ERISA actions on the grounds that the expense ratios of the funds involved were appropriate as a matter of law." (The Prudent Investment Fiduciary Rules)
[Guidance Overview] The 403(b) Hardship Distribution That's Not a Hardship Distribution Under the Proposed Regs
"[A] 403(b) QNEC and QMAC distribution ... is made under Reg 1.403(b)-6(b), under which amounts NOT attributable to elective deferrals can be distributed.... This [has] at least four operational effects: [1] [T]hese amounts CAN be rolled over, unlike a 403(b)(11) distribution of elective deferrals ... [2] [T]he plan document language which will need to be amended is NOT the hardship section. Rather, it is the in-service withdrawal section of the plan document.... [3] [T]he 'financial need,' 'deemed hardship' and other rules required of hardship distributions by statute or regulation will not apply as a matter of law, but only as a matter of chosen plan operational rules ... [4] [T]he 402(f) notice needs to properly identify the tax attributes of this type of distribution, that is, that it can be rolled over." (Business of Benefits)
Relief for 403(b) Plans That Wrongly Excluded Part-Time Workers
"Employers that do not allow part-time employees to make elective deferrals to the 403(b) plan should carefully consider [IRS Notice 2018-95] and determine whether they need to change their administrative procedures or plan documents. Under the transition relief, 403(b) plans may need to operationalize this new guidance as early as January 1, 2019." (Willis Towers Watson)
#10YearChallenge for 403(b) Plans
"The restatement deadline is an opportunity to retroactively restate the plan document (generally, to January 1, 2010) to correct any defects in the terms of the plan documents, such as missed plan amendments. It is also the last chance for tax-exempt employers with individually designed plan documents to restate onto a pre-approved document, as the IRS does not now, and does not intend to, issue approval letters for individually designed 403(b) plans" (E is for ERISA)
The Georgetown University 403(b) Decision and the Future of 403(b) Fiduciary Litigation
"Based on the nature of the arguments within the Court's analysis of the Stock fund, the Court based its opinion purely on the fund's returns, both the fund's nominal, or stated, and risk-adjusted returns. For the courts to start basing decisions even in part on Morningstar' 'star' system is not a good sign." [Wilcox v. Georgetown Univ., No. 18-422 (D.D.C. Jan. 8, 2019)] (The Prudent Investment Fiduciary Rules)
[Guidance Overview] IRS Proposed Regs Relax Requirements for Hardship Distributions
"The proposed regulations generally clarify or supplement recent statutory changes, including those made by the Bipartisan Budget Act of 2018. Except where noted, the rules and changes summarized herein also apply to plans of tax-exempt organizations under Section 403(b).... Except for the required elimination of the six-month contribution suspension as of January 1, 2020, plan sponsors generally will have flexibility with implementing the above changes after the proposed regulations are finalized." (McCarter & English)
Another University Wins 403(b) Suit
"In the course of the 28-page ruling, [Judge Collyer] took the plaintiffs to task for: [1] not appreciating the difference in standing between defined benefit and defined contribution plans ... [2] applying 401(k) plan standards to 403(b) ... and [3] 20/20 hindsight in evaluating investment decisions[.]" [Wilcox v. Georgetown Univ., No. 18-422 (D.D.C. Jan. 8, 2019)] (National Association of Plan Advisors [NAPA])
Who's Got My Beneficiary Designation ... or Who Lost It?
"When plans and participants were younger, it is likely that no one paid these important forms much attention -- after all, no one was going to die, right?! But, with the workforce aging and plans maturing, it will be increasingly important that designations are retained somewhere so that the participant's named beneficiaries get what is coming to them.... Here are a few ideas for making sure you have proper beneficiary information when it is needed[.]" (Ferenczy Benefits Law Center)
[Guidance Overview] IRS Provides Relief for Improper Exclusion of Part-Time Employees from 403(b) Plan Participation
"According to [Notice 2018-95], a 403(b) plan with a provision to exclude employees working less than 20 hours per week will not be considered noncompliant if it did not consider such employees eligible to participate in the 403(b) plan on an ongoing basis once those employees first completed 1,000 hours of service. The Notice includes a 'Relief Period' and a 'Fresh Start.' " (Voya)
[Official Guidance] Text of 2018 IRS Publication 571: Tax-Sheltered Annuity Plans (403(b) Plans) for Employees of Public Schools and Certain Tax-Exempt Organizations (PDF)
22 pages; rev. Jan. 2019. "Beginning in 2018, as part of a provision contained in the Tax Cuts and Jobs Act of 2017, a retirement savings contribution credit may be claimed for the amount of contributions you make before January 1, 2026, to an ABLE account for which you are the designated beneficiary as defined by section 529A." (Internal Revenue Service [IRS])
Bill Would Allow Use of Retirement Plans to Provide Student Loan Repayment Benefits
"[Two U.S. senators] have introduced legislation that would allow 401(k), 403(b) and SIMPLE retirement plan sponsors to use their plans to provide student loan repayment benefits to employees. The Retirement Parity for Student Loans Act would permit these plan sponsors to make matching contributions to workers as if their student loan payments were salary reduction contributions.... The benefit cannot be provided to workers who are not eligible to participate in the retirement plan." (PLANSPONSOR)
[Guidance Overview] Relief for 403(b) Plans Regarding the Exclusion of Part-Time Employees
"During the Relief Period, a section 403(b) pre-approved plan will not be treated as failing to satisfy the conditions of the part-time exclusion or failing to follow plan terms in light of a failure to follow the OIAI exclusion condition, and is not required to be amended to reflect that the plan failed to apply the OIAI exclusion condition. For individually designed plans, an employer has until March 31, 2020, the end of the current remedial amendment period, to amend plan language to reflect the actual application of the OIAI exclusion condition." (Groom Law Group)
[Guidance Overview] Important Guidance and Relief for 403(b) Plan Sponsors Who Exclude Part-Time Employees
"[Notice 2018-95] contains many conditions to qualify for the relief. It also does not provide blanket relief covering all potential administrative issues involving the exclusion of part-time workers. So, just as important as the relief itself is what the relief does not cover, serving as an important reminder to plan sponsors about the circumstances in which part-time employees may be excluded from 403(b) plans." (Jackson Lewis P.C.)
[Guidance Overview] IRS Formalizes and Provides Relief for Section 403(b) 'Once-In-Always-In' Part-Time Rule -- Immediate Action Required
"This appears to be yet another instance where an unrelated retirement plan requirement -- in this case, under ERISA -- is imported through the section 403(b) tax regulations and generally extended to section 403(b) programs.... The plan document relief is highly pragmatic; pre-approved documents are widely in use for section 403(b) programs, and the need to adopt plan amendments is limited to the smaller population of individually designed plans ... The operational relief is less pragmatic, in that the Notice requires all section 403(b) programs potentially to be dealing with its implications in January 2019, less than a month after its release." (Eversheds Sutherland)
Litigation Lessons for 401(k) and 403(b) Fiduciaries: Apply These in 2019
"[1] Your process matters.... [2] Put it in writing.... [3] Know and review your options.... [4] Understand target date funds.... [5] Benchmark plan fees ... [6] Retain an expert to help you.... [7] Consult outside counsel when necessary.... [8] Hold regular committee meetings.... [9] Review your providers.... [10] Schedule regular RFPs." (Cohen & Buckmann, P.C.)
[Guidance Overview] IRS Provides 403(b) Plan Relief for Improper Exclusion of Part-Time Employees
"Employers must begin to operate the part-time employee exclusion under their 403(b) plans correctly for the plan year immediately following the transition relief period, which will mean as soon as January 1, 2019 for many 403(b) plan sponsors.... [M]any employers will need to amend their 403(b) plans to properly reflect the conditions that must be satisfied to exclude part-time employees from 403(b) plan participation." (McDermott Will & Emery)
A Solution to What Shouldn't Be a Problem? IRS Provides Some 403(b) Universal Availability Relief
"[Notice 2018-95] provides some temporary relief from this [Once-In-Always-In] requirement until 12/31/19 for most plans ... But once 2020 rolls around, we will be back to business as usual regarding the rules.... [H]ere are the cliff notes: the rules for excluding employees is a complicated three-part test that requires extensive counting of individual employee hours worked.... Sometimes plan sponsors just make it hard on themselves by electing to administer impossible retirement plan provisions that provide minimal cost savings. This is one of those provisions." (Cammack Retirement Group)
[Guidance Overview] IRS Announces Transition Relief for Excluding Part-Time Employees Under 403(b) Plans
"If a 403(b) plan provides that the preceding-year exclusion is determined on a plan year basis, the Relief Period ends on the last day of the last plan year that ends before December 31, 2019. If a 403(b) plan provides that the preceding-year exclusion is determined based upon an employee's anniversary year, the Relief Period will end on different dates for different employees based upon the date of each employee's anniversary of employment, but no later than December 31, 2019." (Proskauer Rose LLP)
[Guidance Overview] IRS Announces Transition Relief from the Once-In-Always-In Requirement for Excluding Part-Time Employees Under 403(b) Plans
"[F]or purposes of excluding part-time employees, the Final Regulations impose three distinct conditions that employers must satisfy for an employee to be excluded.... Many employers applied the first-year exclusion condition for an employee's first year and applied the preceding-year exclusion condition separately for each succeeding Exclusion Year, but did not apply the OIAI requirement to prevent an employee who failed to meet either the first-year exclusion condition or the preceding-year exclusion condition from being excluded in all subsequent Exclusion Years." (Proskauer's ERISA Practice Center)
[Guidance Overview] The Ins and Outs of 403(b) Deferrals -- IRS Solves the Problem
"[T]here are many 403(b) plans ... that have operated for years in good faith under the in-and-out rule. Most 403(b) plans are now being restated onto preapproved documents, with a retroactive effective date of 2010. The plan language contradicts the plans' operations for nearly a decade, thereby running the risk that the IRS would consider those operations as failures to comply with Section 403(b) -- a potentially very costly result.... Notice 2018‑95 addresses this issue in several ways." (Ferenczy Benefits Law Center)
[Guidance Overview] IRS Provides Relief for 403(b) Plans Regarding Part-Time Employee Exception to Universal Availability Requirement
"Notice 2018‑95 provides transition relief ... in response to comments indicating that many employers did not apply the ['once-in-always-in'] exclusion condition when an employee failed to meet the first-year or preceding-year exclusion condition.... The Notice provides for a 'fresh start opportunity' for plans after the relief period ends for exclusion periods beginning on or after January 1, 2019." (Thomson Reuters Practical Law)
[Guidance Overview] Tax-Exempt Employers: IRS Issues Relief from Confusing 403(b) Eligibility Requirement Applicable to Part-Time Employees
"403(b) plans that had improperly excluded part-time employees ... will not be considered as having failed to satisfy the universal availability requirement, provided that such plans were consistently administered under the first year and preceding year exclusion conditions.... This relief is extended [by Notice 2018‑95] for the period starting with the first tax year beginning after December 31, 2008, ... and through the last exclusion year that ends before December 31, 2019." (Seyfarth Shaw LLP)
A Close Look at ERISA 403(b) Plans, 2015 (PDF)
68 pages. "In 2015, four-fifths of large ERISA 403(b) plans covering nearly three-quarters of large ERISA 403(b) plan participants had employer contributions.... 37 percent [of these plans] had automatic employer contributions, 60 percent had simple matches, and 16 percent had both of these features ... 55 percent of large ERISA 403(b) plans had participant loans outstanding ... The average large ERISA 403(b) plan offered 27 core investment options in 2015[.]" (BrightScope and Investment Company Institute [ICI])
The Proposed Hardship Distribution Regs: Some Misconceptions
"Plan sponsors are NOT required to eliminate the provision that borrowing be exhausted in order to take a hardship distribution ... Plan sponsors MUST eliminate the requirement to suspend elective deferrals for six months following a hardship distribution ... These regulations have no effect on 457(b) plans." (Cammack Retirement Group)
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