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December 22nd, 2015

Can 403(b)s Offer Managed Accounts?

“Can a 403(b) plan offer managed accounts?”Read more >
Mercer suggests top questions defined contribution (DC) plan sponsors should ask about their retirement plans going into 2016.Read more >

Going from No HCEs to Having HCEs

“I have worked with a small private tax-exempt that, since its inception many years ago, has had no concerns regarding nondiscrimination testing for its 403(b) plan, since it employed zero highly compensated employees (HCEs). However the organization is growing, and, given the most recent raise for the executive director, she is expected to exceed (barely) the HCE compensation threshold for 2015. Is there a transitional period to pass testing? The plan utilizes a non-safe harbor match that would likely fail ACP testing, I suspect that they would be reluctant to change a plan design that they have enjoyed for many years, for financial and other reasons.”Read more >

Form 5500 Fee Info Doesn’t Match Plan Expenses

“I am commencing the process of reviewing the 2014 Form 5500 for our calendar-year ERISA 403(b) plan. I noticed that the fees listed in Schedule C are lower than what I calculate plan expenses to be based on the service provider disclosures that are delivered to us, as well as other documentation. Shouldn’t these figures reconcile?”Read more >

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Nondiscrimination Testing Required for 403(b)s

“What types of nondiscrimination tests are required for 403(b) plans? For example, is a top-heavy test required?”Read more >

Evaluating Share Class Expenses

“How do I find out if the share classes of mutual funds in my retirement plan are the cheapest share classes offered, the most expensive, or somewhere in  between?”Read more >

Inactive Vendor Accounts Counted Towards Cashouts?

“We are reducing the number of recordkeepers in our Employee Retirement Income Security Act (ERISA) 403(b) retirement plan from five to a sole recordkeeper, beginning in 2016. At the same time, we wish to add a small balance cash-out provision to our plan. Must we count the balances of the inactive vendors in determining the cash-out amount?”Read more >

Correction for Mandatory Contribution Failures

“Our 403(b) plan has an employee mandatory contribution feature that is a condition of employment. We recently changed payroll systems, which resulted in a failure to withhold mandatory contributions from several employee paychecks until the error was discovered. I looked to the Internal Revenue Service (IRS) guidance about the Employee Plans Compliance Resolution System (EPCRS), but there appears to be no mention of employee mandatory contributions in EPCRS at all. Am I missing something?”Read more >

David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, will field your questions concerning 403(b) plans and regulations. Send them to rmoore@assetinternational.com with Subject: Ask the Experts. Answers may be printed in future (b)lines. This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

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