Total Articles: 7
Some Colleges and Universities to Receive 403(b) Plan Questionnaires from IRS
The Internal Revenue Service has announced that it is sending 403(b) compliance questionnaires to a random selection of approximately 300 colleges and universities (both public and private) as part of an increased effort to enforce certain rules that apply to these institutions’ 403(b) retirement plan arrangements. The questionnaire focuses heavily on the “universal availability” requirement, under which all employees (with limited exception) must be able to make elective deferrals into their retirement accounts within the plan. The questionnaire is designed to identify plans that are improperly excluding certain employees from making elective deferrals. More information on this IRS initiative, including a link to the questionnaire, may be found on the IRS website.
Eligibilty Requirements for 403(b) Plans Differ From 401(k) Plans.
Employers who sponsor a 403(b) tax-deferred annuity plan for their employees need to be aware of the "universal availability" eligibility requirement for employee pre-tax deferral contributions.
403(b) Plan Compliance Issues Unearthed: Problems Encountered in 2010
In the past, unless a 403(b) program (or plan) was subject to the Employee Retirement Income Security Act of 1974, it had no documentation requirements and, even if subject to ERISA, very few reporting obligations. The last several years changed all that: In 2007, the Internal Revenue Service and the U.S. Department of Labor issued regulatory guidance (1) that vastly altered documentation and reporting obligations for 403(b) plans. As a result, the 403(b) plan environment is overhauling itself: plan administrators are learning plan administration duties, applying new regulations, complying with deadlines, re-examining single- and multi-vendor relationships . . . And, not surprisingly, 2010 is the year that is illuminating retirement plan problems plaguing 403(b) plan sponsors.
Making it Easy on 403(b) Plans.
Many sponsors of 403(b) plans (also known as tax-sheltered annuities) will be required to file a full-blown Form 5500 for the first time in 2010, with respect to the 2009 plan year. There is concern, however, that numerous questions left unanswered by the Internal Revenue Service's recent Final Regulations in terms of a plan's treatment of its contracts and other investments must be answered in order for these filings to be possible.
Legal Alert: IRS Provides 403(b) Relief.
On December 11, 2008, the IRS issued a notice (Notice 2009-3) extending the January 1, 2009 deadline by which 403(b) plans are required to have written plan documents that comply with applicable regulations.
403(b) Compliance Deadline is Approaching.
If you are a sponsor of a 403(b) Plan (aka Tax-Sheltered Annuity or Tax-Deferred Annuity), you are probably aware of the December 31, 2008 deadline to bring your plan into compliance with the Regulation issued by the IRS last year. If you miss this deadline, then, effective January 1, your tax sheltered annuities will no longer be tax-sheltered, meaning that your employees will no longer be able to make contributions on a pre-tax basis, and, more importantly, will be taxed on the value of their accounts.
Regulation Watch.
The IRS issued final regulations relating to tax-sheltered annuities (Code section 403(b)) on July 26, 2007. Generally, the regulations adopt the provisions of the proposed regulations, and consolidate guidance since the last Code section 403(b) regulations were issued in 1964.
