(b)lines Ask the Experts – Year-End Considerations

December 27, 2011 (PLANSPONSOR (b)lines) – “I am enjoying a wonderful Holiday Season! Can I sail right into the new year, or are there any surprises in store for me at year-end as a 403(b) plan sponsor?”

Michael A. Webb, Vice President, Retirement Plan Services, Cammack LaRhette Consulting, answers:  

Well there probably won’t be and year-end problems if you’ve been a good little plan sponsor this year! But seriously, 2011 was an unusual year in that much of the usual year-end plan document or other legal housekeeping will likely be limited in nature. The primary reason for this is that there was not much in the way of major legislative or regulatory activity related to retirement plans in general, and 403(b) plans in particular in 2012. Two major pieces of guidance that we were expecting in 2011, a prototype program for 403(b) plans and revised EPCRS guidance for plan corrections, have been delayed.  However, the Experts always advise plan sponsors to check with benefits counsel that is well versed in 403(b) plans to determine if any item relating to your specific plan should be addressed by year-end.  

Though not a year-end deadline, there is another major deadline for ERISA 403(b) plans that will occur right after the Holidays; namely, the Form 8955-SSA filing deadline of January 17, 2012. The 8955-SSA filing generally reports participants who separated from service with a vested benefit, but did not receive a full distribution, and is applicable for 403(b) plans for the very first time for participants who terminated employment beginning in 2008.  

Unlike the 5500 filing, which is filed with the DoL, this form must be filed with the IRS. Preparations should be well underway with your plan vendor(s) to either a) provide you with a signature-ready filing or b) provide you with the information necessary to complete the filing yourself. For more details, see the IRS Q&A (http://www.irs.gov/retirement/article/0,,id=238940,00.html) in this regard; pay special attention to the final Q&As on the list, which relate specifically to 403(b) plans. Since this is a brand new filing, plan sponsors would be particularly ill-advised to wait until the last minute to file, so be certain to conclude preparations as soon as possible!  

Thanks for the question, and from all of the Experts, I would like to extend the warmest of Holiday greetings to all of our readers!  


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.