Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Compliance July 15, 2011
IRS 403(b) Plan Checklist a Tool to Aid with Compliance
July 15, 2011 (PLANSPONSOR.com) – The Internal Revenue Service says it is important for 403(b) plan sponsors to annually review the requirements for operating their plans.
Reported by Rebecca Moore
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 http://www.irs.gov/pub/irs-tege/pub4546.pdf.
You Might Also Like:
How Should Plan Sponsors Stand Up a New Retirement Plan Committee?
Plan sponsors can find education and training for their retirement plan committees from several sources, but how best to build...
How Sponsors Can Get the Most out of DC Plan Design Changes
Annuities may be a hot topic, but sponsors can add the most value to plans by incorporating features like auto-enrollment...
Benefits |
DOL Prevails in Court Orders, Removing TPA From Acting as Fiduciary for Sponsors
The regulator prevailed in motions against a Pennsylvania retirement third-party administrator it alleges stole $5.5 million in retirement plan assets...