IRS 403(b) Plan Checklist a Tool to Aid with Compliance

July 15, 2011 ( – The Internal Revenue Service says it is important for 403(b) plan sponsors to annually review the requirements for operating their plans.

As a tool to aid 403(b) plan sponsors in keeping in compliance with IRS regulations, the agency provides on its Web site a 403(b) Plan Checklist. The document also explains important rules of which sponsors need to be aware.  

The Checklist includes 10 questions sponsors should ask themselves when reviewing their plans: 

  • Does your organization qualify as a public educational institution or as a charitable organization exempt from tax under Internal Revenue Code 501(c)(3)? 
  • Are ALL employees who normally work 20 hours or more per week (universal availability rule) given the opportunity to make a salary deferral? 
  • Are elective deferrals, including any designated Roth contributions, limited to the amounts under IRC 402(g) in a calendar year? 
  • Are the total employer and employee contributions limited so as not to exceed the IRC 415(c) limits? 
  • If the IRC 402(g) “15 years of service catch-up” contributions are being made, does the employee have the required 15 years of service with the same employer? 
  • If your program permits age 50+ catch-up contributions, were each of your employees age 50 and over informed of their rights to make these deferrals? 
  • Does the 403(b) annuity contract or custodial account contain the nontransferability provisions (annuity contracts only); state the limits under IRC 402(g); and contain the direct rollover provisions of IRC 401(a)(31)? 
  • If your plan offers a 5-year post severance provision, are amounts contributed through a non-elective method? 
  • Are you (as the employer) and your vendor enforcing participant loan repayments and limiting aggregate loan amounts as required under IRC 72(p)? 
  • Are you and your vendors requiring documentation that hardship distributions meet the definitions and requirements for hardship found in the IRC 401(k) regulations? 


The complete document is at