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Ask the Experts November 24, 2009
(b)lines Ask the Experts – Deselecting Vendors after 1/1/09
November 24, 2009 (PLANSPONSOR (b)lines) – A third party administrator has clients working to restate their 403(b) plans by December 31, 2009.
Reported by PS
The
TPA asks: “Is it possible to
deselect vendors that have received contributions during the 2009 plan year?”
Yes, a
plan may provide that one or more vendors who were eligible to receive
contributions in 2009 will no longer be eligible to receive contributions in
2010. However, where contributions were made to a provider on or after
January 1, 2009, the transition relief provided in Revenue Procedure 2007-71 is
not available. Instead, the plan should ensure that it has an information
sharing agreement in place prior to 2010 as required by the final 403(b)
regulations. The plan administrator will then need to work to ensure that
these legacy vendor accounts are properly taken into account for distribution,
hardship, loan, and other 403(b) compliance requirements in 2010 and future
years.
–David Levine, Groom Law Group, Chartered
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.