November 15, 2011 (PLANSPONSOR.com) - The ERISA Advisory Council recommended to Department of Labor officials that the department grant 403(b) plans a “fresh start” on certain disclosure and reporting requirements, reports BNA.
The Advisory Council's reasoning for this recommendation centers around several challenges currently facing sponsors of safe harbor Section 403(b) plans, including plan sponsors' inability to locate annuity contracts that were thought to no longer be part of the plan—but under new guidance are still considered plan assets—the council said, according to BNA. The council’s final report will give details as to why a “fresh start” approach would be appropriate.
The council also recommended that the department issue guidance stating that the definition of “plan assets” does not include “any individual contract, certificate or custodial account that is transferred to a former employee when there is no further obligation by the employer.”
BNA said the DoL also was asked to provide further guidance on the “safe harbor exclusion from Title I of ERISA for qualifying [Section] 403(b) plans,” according to the council's presentation of its final recommendations to Seth D. Harris, deputy labor secretary; Phyllis C. Borzi, assistant secretary for DoL's Employee Benefits Security Administration; and Michael L. Davis, EBSA deputy assistant secretary. The Advisory Council’s request for comment (Issue Statement) and witness testimony can be found at http://www.dol.gov/ebsa/aboutebsa/erisa_advisory_council.html.