(b)lines Ask the Experts – Future Adoption of Annuity Contracts and Custodial Accounts

January 14, 2014 (PLANSPONSOR (b)lines) – “Some of our clients plan on keeping their individually designed 403(b) plan documents after the IRS begins approving prototype and volume submitter 403(b) plan documents.

“Do the experts believe the annuity contract and custodial account providers will be willing to continue offering annuity contracts and custodial accounts to these individually designed plans?” 

David Levine with Groom Law Group, answers:

While no one can be sure, given that many providers have been working with individually designed 403(b) plans for years, including after the 403(b) plan document requirement went into effect in 2009, the experts would not be surprised if a wide variety of annuity contract and custodial account options remained available to individually designed 403(b) plans. Of course, much as is the case with small 401(k) plans, some providers to “start-up” or very small 403(b) plans may, for some products, require the use of their preapproved plan document with their annuity contract and/or custodial account options. In a year or two, we’ll definitely know more. 

Thanks for asking!


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.