“Also, is there any expectation that in the future 403(b) Plan Documents will be required to be forwarded for approval with the IRS?”
Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:
Given past expectation of when the proposed prototype program for 403(b) plans would be released (see “Ask the Experts: Where is the Prototype Program?”), any guess that the Experts would offer at this time would be just that. However, a “Revenue Procedure on 403(b) Plans”, which would presumably include the prototype program, is listed in the IRS’ 2012-2013 Priority Guidance Plan, which covers the time period from now until June of 2013. Thus, it would not be unreasonable to expect the program to be released no later than June of 2013, but, to be fair to the IRS, there are 316 other projects in the Priority Guidance Plan, and I would expect that not all of those projects will be completed within this timeframe.
As for an approval program for 403(b) plan documents, it is unlikely that such a program will be required, as even the current program for approval of other qualified plans, such as 401(k) and 401(a) plans, is not mandatory. However, as is the case with qualified plans, there will be no reliance that a plan document satisfies the Code without IRS approval (currently in the form of an IRS determination letter). Thus IRS approval of qualified plans, though not a requirement, has become the norm, rather than the exception, and such approval could become customary for 403(b) plans as well. Finally, it should be noted that a determination letter for IRS approval of individual plans will likely not be introduced until some time after the prototype program is unveiled.
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.