Richard Turner, Vice President and Deputy General
Counsel, VALIC, reminded attendees that although the effective date of having a
written plan in place was extended to December 31, 2009, the relief was
conditional on plans operating in compliance with the new regulations effective
this year, so sponsors should look back and clean up any operational defects in
plan administration. The written plan requirement is not new for ERISA-governed
403(b)s; however, Turner said under the new regulations, the written plan must
list providers, so sponsors may have to amend their plans to include that list
or at least reference the list via an external document.
Plans no longer receiving contributions (frozen) still
must have a written plan document.
Compliance requirements for ERISA 403(b)s include all the
requirements Turner discussed pertaining to non-ERISA 403(b)s in an earlier
Webcast, with a few additions (see End-of-year Checklist for Non-ERISA 403(b)s). For example, in addition to
universal availability rules, ERISA plans are subject to ACP testing (see Things to Know about Average Contribution Percentage Testing).
Also, ERISA plans are now required to file a full Form
5500 starting with 2009 plan year reporting, and plans with over 100
participants are required to perform and audit. Sponsors of ERISA 403(b)s
should look to plan providers to provide information for the reporting or to provide
forms themselves for sponsors and their counsel to review, Turner reminded
Webcast attendees that the Department of Labor provided some relief on
including data from certain old providers and on including a disclaimer that
the auditor relied on what information that could be obtained (see DoL Relief on Form 5500 Reporting Requirements for 403(b)s).
While the DoL has not specifically answered the question
for ERISA plans – beyond identifying what needs to be included on the Form 5500
– Turner said it is assumed that all providers are considered in the plan if they
have assets related to plan that have not been distributed or transferred out
of the plan.
For sponsors that may have to coordinate loan, hardship,
or contribution limit compliance between ERISA and non-ERISA plans, Turner
noted that often the ERISA plan has a provider that automatically coordinates
information. In addition, some sponsors that maintain both an ERISA plan and a
non-ERISA plan have non-ERISA plan providers agree to share data in return for
being able to access information about other plan accounts.
Corrections of plan defects are available for ERISA plans
through the Internal Revenue Service’s Voluntary Fiduciary Correction Program