Benefits July 29, 2009

Public Access TV Station Rejects 403(b) in Favor of SIMPLE IRA

July 29, 2009 (PLANSPONSOR.com) - The board of directors for PEGASYS, a public-access television station in Enid, Oklahoma, has approved a change in employee retirement plans.
Reported by

Employees will now participate in a SIMPLE IRA plan, rather than a 403(b) plan. According to the Enid News & Eagle, Wendy Quarles, executive director of PEGASYS, said the change was recommended by an accountant, who told the board the 403(b) plan is no longer suitable for nonprofits. She added that the change makes the plan better adaptable to a nonprofit organization, the newspaper said.

The news report did not elaborate on the particular reasons the accountant believed the 403(b) plan was no longer suitable.

The change limits the contribution by PEGASYS to 3% of each employee’s gross monthly salary, versus the 6.5% contribution under the prior 403(b) plan. According to the news report, to compensate for the change in contribution rate, PEGASYS is increasing salaries of employees currently participating in the SIMPLE IRA by 3.5%.

Employees may contribute up to $10,000 annually to the plan.

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