IRS Publishes Additional 403(b) Plan Document Guidance

An information package contains a listing of required modifications and sample language for nearly any provision a plan might include.

The IRS has published a “Listing of Required Modifications and Information Package” for 403(b) pre-approved plans.

The information package contains samples of plan provisions that have been found to satisfy certain requirements of Internal Revenue Code Section 403(b) and related regulations. The IRS says it has prepared the package to assist providers that are drafting 403(b) pre-approved plans, and to accelerate the agency’s review of them.

The information package has been updated to reflect the 2022 Cumulative List of Changes issued by the IRS in January.

Although the package is intended to assist 403(b) pre-approved plan providers in drafting plan documents, the IRS says insurance companies and custodians may also look to the language of the sample provisions in drafting terms of annuity contracts and custodial accounts that are required by IRC Section 403(b). The agency also notes that a 403(b) pre-approved plan may use either a single plan document format or a basic plan document with an adoption agreement, and the sample provisions included in the package may generally be used with either format. However, it says, a plan design using a single document format will need to make appropriate adjustments.

The comprehensive package contains general sample plan provisions applicable to:

  • plans that do not accept contributions other than elective deferrals;
  • plans that accept contributions other than elective deferrals;
  • standardized and non-standardized 403(b) pre-approved plans; and
  • a retirement income account.

Noting that certain 403(b) pre-approved plans might be covered by Title I of the Employee Retirement Income Security Act, the IRS says it does not have jurisdiction over Title I, so the package does not contain sample Title I plan provisions. However, the agency has developed sample plan provisions to enable Section 401(a) pre-approved plans to comply with IRC qualification requirements that have parallel Title I requirements, and the information package contains links to help drafters of ERISA 403(b) pre-approved plans comply with Title I.

In Revenue Procedure 2019-39, the IRS established a recurring remedial amendment period for 403(b) plans, and the submission period for Cycle 2 applications will begin on May 2, 2022, and end on May 1, 2023.