(b)lines Ask the Experts – Combined Asset Report

August 27, 2013 (PLANSPONSOR (b)lines) – "We are a tax-exempt 501(c)(3) organization and maintain am ERISA 403(b) plan as well as a 457(b) plan.  Our vendor provides us a combined asset report.  Is this okay?"

David N. Levine, Groom Law Group, answers:


A summary of assets is not subject to any specific requirements so your vendor may just be trying to provide a user-friendly summary of all assets in one place.  However, it is key to make sure of a few things:


First, make sure that your 403(b) investments are in “proper” 403(b) vehicles (such as annuity contracts or custodial accounts in most cases).


Second, make sure that when you do the Form 5500 annual report for your 403(b) plan, you are not including 457(b) plan assets.


Third, make sure that your 457(b) assets are not held in a trust (or similar annuity contract or custodial account) unless it is a “rabbi trust” that is treated as a “grantor trust” owned by your institution.


NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.