News Archive

"Broader multi-asset portfolios with in-plan annuities surpassed $115 billion, an increase of 150% compared to two years ago ... While half of these assets are in managed accounts for 403(b) plans ... momentum is increasing for target-date strategies in 401(k) plans. Assets in target-date funds with annuities secured $42 billion as of March, up from $25 billion the year prior."  MORE >>

"Employers that sponsor 403(b) plans should: [1] Confirm whether their plan uses a preapproved IRS plan document. [2] Coordinate with their plan vendor, third‑party administrator and legal counsel to obtain the Cycle 2 restated plan document. [3] Formally adopt the updated plan document by Dec. 31."  MORE >>

"To be eligible for the 15-year catch-up election, an employee must have completed at least 15 years of service with the qualified organization sponsoring the plan.... [A] 'year of service' is based on an employee's work period, which may be different from the taxable year.... The sponsor must credit an employee who works full-time throughout the entire work period with a full year of service, and credit an employee who only works part-time, or full-time for part of the work period, with a fraction of a year."  MORE >>

"The deadline was December 31, 2026, but [Notice 2026-9] has extended it to December 31, 2027.... This new extension does not apply to qualified plans, 403(b) plans, or 457(b) plans of state and local governments. The deadline for their amendments remain December 31, 2026, with certain exceptions for collectively bargained and governmental plans."  MORE >>

"[S]tudents, nonresident aliens, and employees eligible to other plans can still be excluded from the plan, as long as the exclusions are applied consistently to all employees who still meet each category.... Employer contributions not required, but permitted/LTPT inclusion in the testing sometimes required, sometimes permitted.... Former LTPT employees and vesting: nobody said life would always be fair.... Mistakes happen: correcting improper exclusion of LTPT employees.... How will the auditors test LTPT administration?"  MORE >>

"For public schools, both the 403(b) and 457(b) are non-ERISA governmental retirement plans, meaning they are not subject to ERISA. While the two plans share many similarities ... [t]he ability to take penalty-free distributions upon separation -- regardless of age -- is one of the most significant advantages of the 457(b) plan."  MORE >>

33 pages; rev. Jan. 2026. "What's new for 2025: Catch-up contributions.... What's new for 2026: [1] Retirement savings contributions credit.... [2] Limit on elective deferrals.... [3] Limit on annual additions."  MORE >>

"Among 403(b)s with 1,000 or more participants, 21.4% also had a 401(k) plan, 26.8% had a 457(f) plan, and 37.5% had a 457(b) plan. In general, the smaller the 403(b) sponsor, the less likely they were to have another plan.... 403(b)s with 200 to 999 participants had a 457(f) 23.2% of the time, and 24.6% for 457(b)s."  MORE >>

"The [DOL] has withdrawn its previous support of plaintiffs in a case concerning the burden of proof involving a university 403(b) plan. The suit against Yale University was one of the first to be filed against university 403(b) plans ... in August 2016." [Vellali v. Yale Univ., No. 16-1345 (D. Conn. Jun. 28, 2023; on appeal to 2d Cir. No. 23-1082)]  MORE >>

"An effective RFP will determine the quality of the respondents and will help reduce the time and effort expended in the overall RFP and selection process.... [T]he plan sponsor should provide audit firms with sufficient information about the nature of the plan and the engagement to allow them to make a meaningful and comprehensive proposal that addresses your specific needs and evaluation criteria."  MORE >>

"Bipartisan legislation to change securities laws so 403(b) plans can offer collective investment trusts (CITs) passed the House on Dec. 11 as part of a larger package of capital market reforms (HR 3383). The CIT-related changes appear in a section entitled Retirement Fairness for Charities and Educational Institutions. The outlook for companion Senate legislation (S 424) is uncertain, but supporters hope the changes might pass Congress sometime in 2026."  MORE >>

"The full House voted 302-123 to approve the Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025 [HR 3383], which includes a provision to amend securities laws to allow 403(b) plans to invest in collective investment trusts (CITs), aligning them more closely with 401(k) plans."  MORE >>

"PSCA's 2025 403(b) Plan survey shows that automatic enrollment is beginning to take hold in 403(b) plans, boosting participation rates to all-time highs. The survey also shows big jumps in the adoption of Roth, investment advice, and SECURE Act provisions."  MORE >>

"A variety of nonprofit organizations have called on top leaders from both chambers of Congress in support of legislation that would allow plan sponsors of 403(b)s to include collective investment trusts (CITs) in their investment lineups."  MORE >>

"The class action lawsuit, dismissed in 2010, did not deter the NEA, but raised awareness of potential conflicts of interest when unions endorse costly financial/retirement products for their members."  MORE >>

"401(k), 403(b), 457(b) plans: Automatic Roth designation for catch-up eligible participants earning over $150,000 (as adjusted for inflation) ... Group health plans: gag clause attestation."  MORE >>

"Defined Contribution (DC) plans -- primarily 401(k)s and 403(b)s -- now hold over $12 trillion in assets ... Within these plans, Target Date Funds (TDFs) are the default investment option for most participants. Increasingly, TDFs are being housed in Collective Investment Trusts (CITs) rather than SEC-registered mutual funds.... CITs operate in a poorly regulated gray zone.... TDFs held in state-regulated CITs are therefore emerging as one of the most dangerous and least transparent areas in the retirement system."  MORE >>

"The deadline by which a plan sponsor must amend its retirement plans depends on the plan type. Here’s a list of the current amendment deadlines by plan type."  MORE >>

"In 403(b) plans, employees with at least 15 years of service at eligible employers, such as public schools and certain nonprofits, may qualify for an additional catch-up contribution of up to $3,000 per year, capped at $15,000 total. The Roth catch-up requirement does not apply to these ... Similarly, for governmental 457(b) plans, the Roth requirement applies only to the extent catch-up contributions exceed the regular 457(b) limit."  MORE >>

"[If] a worker does not have FICA wages (e.g., a governmental agency employee not covered by a Section 218 Agreement), Section 603 does not apply.... If your plan's service providers cannot confirm they have appropriate systems in place to comply with Section 603's requirements, and you are considering prohibiting catch-up contributions until they do, this would require an advance amendment prior to January 1, 2026. "  MORE >>

"A key decision for employers is whether to implement the deemed election process.... A plan may use either of the two new correction methods, but it must apply the same correction method to similarly situated participants.... The deadline to correct a failure using these correction methods depends on which limit is the basis for the redesignating pre-tax deferrals as catch-up contributions.... Special rules apply to dual-qualified plans (plans qualified under both U.S. and Puerto Rico law). "  MORE >>

"Final regulations also provide some clarity on the optional 'super' catch-up contributions that were permitted starting on 2025. Plan sponsors have several design and administrative decisions to make before implementing these changes, and plan amendments reflecting these changes are due by December 31, 2026."  MORE >>

"[W]ithout a statutory change, 403(b) investments are still limited to annuity contracts and custodial accounts holding mutual fund investments. None of these will support the typical private equity investment. Even should the proposed 403(b) CIT legislation ever pass, it would likely still be insufficient to support private equity investments from being held by most 403(b) plans."  MORE >>

"Each employer that sponsors a 403(b) plan which uses a pre-approved plan document must ensure that document is restated to account for changes in law by December 31, 2026. Especially for those nonprofit and public sector organizations characteristically facing resource and staffing constraints, it’s crucial to start the restatement process now."  MORE >>

"The suit alleges that the defendants 'based the decision of how to allocate forfeitures solely on the company's own self-interest and failed to consider … the interests of the plan and its participants.' In the past two years, at least 50 class-action 401(k) lawsuits have been filed by plan participants over misuse of forfeited assets from former employees." [Tillery v. WakeMed Health & Hospitals, No. 25-0408 (E.D. N.C. complaint filed Jul. 10, 2025)]  MORE >>