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403(b) Archives

Formal IRS Notice 2009-3 Revisited: Rely on Written Guidance Over Verbal

The February 18 issue of School Business Daily reported comments made in a recent webinar by Robert J. Architect, senior IRS tax law specialist regarding IRS Notice 2009-3, which outlines the conditions under which the IRS "will treat plans as meeting the requirements of 403(b) and the regulations during the 2009 calendar year." According to Architect, the conditions do not mean "the adopted plan has to be effective as of January 1, 2009, or that sponsors have to correct back to January 1, 2009, operations in contrast to the terms of the plan." Instead, "plans must satisfy the regulations that were in effect as of January 1, 2009, and sponsors must correct operations in contrast to the terms of the plan as of the plan's effective date." Notwithstanding Mr. Architect's verbal comments, school business officials should be aware that the written guidance is the standard used in determining whether your district is in compliance. ASBO encourages members to have legal counsel review IRS Notice 2009-3 and to have the written plan in place as quickly as possible to ensure that its terms can be followed during 2009.

IRS Plans New Compliance Check Questionnaire for Governmental 401(a) Plans

In a February 19, 2009 posting on its website, the IRS Employee Plans Compliance Unit announced the launch of its Governmental Plan Questionnaire and a request for comments by May 19, 2009. This follows completion of a 403(b) Compliance Check questionnaire on universal availability concerning employees eligible to participate in a school's 403(b) plan. The IRS will send a pilot questionnaire to 25 selected school districts. Go to the IRS Website to see the cover letter, 401(a) plan questionnaire, and request for comments.

Survey of 403(b) Plan Administrators in the K-12 Market: Summary of Results

ASBO International and LIMRA, a financial services industry trade association, surveyed K-12 school administrators to find out how school districts are implementing the 403(b) regs. Results from the survey reveal important plan changes and issues, such as the cost of providing administrative services and which parties are paying them, that are by no means settled. Find out how your district compares.

Download the survey results (76K file)

Orphan Accounts Responsibility Sorter

What is an "orphan 403(b) account," anyway? Which are "grandfathered," which are not, and how does my school handle each type? Here are definitions, explanations, and concise charts to help you define your school's information sharing responsibilities.

Download the Orphan Accounts Responsibility Sorter as a PDF document (198K)

ERISA / Fiduciary Q & A

Do the final 403(b) regulations cause public education employers to become plan fiduciaries? This and other questions on the topic have been causing great concern among ASBO members. Here are answers to help alleviate the confusion.

Download the ERISA / Fiduciary Q & A as a PDF document (188K)

TPA Checklist - Questions to Guide Selection of a Third Party Administrator

Demand has been high for this list of questions to assist school business officials in selecting a TPA once their districts have decided hiring a TPA is the most effective option.

Download the TPA Checklist as a PDF document (68K)
Download the TPA Checklist as a Word document (53K)

403(b) Action Plan Checklist and Timeline for Compliance by 2009

Start with this indispensible overview that will help organize and prioritize your 403(b) compliance process.

Download the action plan checklist and timeline as a PDF document (25K)
Download the action plan checklist and timeline as a Word document (54K)

403(b) Services and Service Provider Options: Reference Guide and Responsibility Matrix

Mark this two-part resource as square one in your decision making process. The reference guide describes the different types of services and providers available to help you and your district comply with the new 403(b) regulations. The responsibility matrix is a straight forward chart to help you choose the services and providers that fit your district's needs.

Download the reference guide and responsibility matrix as a PDF document (241K)
Download the reference guide and responsibility matrix as a Word document (94K)

Sample Questions to Guide Selection of Potential 403(b) Service Providers

How will you choose the best providers for your district? Do you know which questions to ask to help separate the wheat from the chaff? Take the mystery out of your selection with this list of sample questions to ask potential service providers.

Download the sample questions as a PDF document (117K)
Download the sample questions as a Word document (47K)

Investment Provider Service Agreement

Recognize the essential components of a contract specifying the duties and responsibilities of the school and the 403(b) service provider by utilizing this sample co-created by ASBO International's 403(b) Retirement Plan Council and Pennsylvania ASBO's IRS 403(b) Regulation Task Force.

Download the investment provider service agreement as a PDF document (96K)
Download the investment provider service agreement as a Word document (68K)

How a 403(b) Plan Helps You Save

Discover how a 403(b) retirement plan allows school employees to set aside money on a tax-deferred basis for retirement using a payroll deduction process. This primer, co-created by ASBO International's 403(b) Retirement Plan Council and Pennsylvania ASBO's IRS 403(b) Regulation Task Force, is a valuable employee education resource.

Download the 403(b) primer as a PDF document (93K)
Download the 403(b) primer as a Word document (55K)

Salary Reduction Agreement for 403(b) Programs with Worksheets

Refer to this sample salary reduction agreement and accompanying worksheets, co-created by ASBO International's 403(b) Retirement Plan Council and Pennsylvania ASBO's IRS 403(b) Regulation Task Force, when designing the necessary enrollment forms for your school's employees.

Download the salary reduction agreement as a PDF document (110K)
Download the salary reduction agreement as a Word document (64K)

Download the salary reduction agreement worksheets (336K)

Sample 403(b) Information Sharing Agreement

To help you and your district make a smooth transition to the new 403(b) regulations, ASBO International's 403(b) Retirement Plan Council and Pennsylvania ASBO's IRS 403(b) Regulation Task Force co-created a sample information sharing agreement.

Download the sample information sharing agreement as a PDF document (25K)
Download the sample information sharing agreement as a Word document (49K)

403(b) Plan Document for Public Education Organizations

Pull it all together with inspiration from this model common plan document and adoption agreement, co-created by ASBO International's 403(b) Retirement Plan Council and Pennsylvania ASBO's IRS 403(b) Regulation Task Force.

Download the common plan document as a PDF document (67K)
Download the common plan document as a Word document (105K)

Download the common plan adoption agreement as a PDF document (38K)
Download the common plan adoption agreement as a Word document (62K)

IRS Video - 403(b) Annuities: What Educational Employers Need to Know to Do Their Jobs - Available Now in Streaming Video

Join IRS tax law specialists Robert J. Architect and Benise Ungar for a 60-minute step-by-step explanation of what school business officials need to know and do to achieve district compliance with the final 403(b) regulations issued in July 2007.

Learn how to create a written plan, determine participant eligibility, handle transfers and exchanges, and keep abreast of the new responsibilities that fall to school districts.

Find the video and additional downloads here

403(b) Final Regulations Released

The highly anticipated IRS 403(b) final regulations were released July 23, 2007 and are available on the IRS Website.

Preview of Changes for ASBO International Members
ASBO International will provide up-to-the-minute resources to help you prepare for implementing the new regulations. The first resources are:

An UPDATED three-page summary of what your school district needs to know, developed by ASBO legislative affairs committee member and employee benefits counsel, Martha Hutzelman, Esq. (Updated August 16, 2007)

A PowerPoint presentation for school administrators (converted to .PDF format) created by Robert J. Architect, TEGE, of the IRS.

The IRS's Employee Plans News, special July 2007 edition, with highlights of the new regulations.

The complete text of the final regulations from the July 26 Federal Register in .PDF format, or as text-only .

IRS Extends "Formal" Written Plan Deadline - But Effective Date Remains Unchanged
The guidance issued by the Internal Revenue Service (in Notice 2009-3) on December 11, 2008 did not extend the general effective date of the final 403(b) regulations. Rather, it provides some limited relief by extending the deadline for employers to adopt a written plan document. School districts should continue to take steps to be ready to operate their 403(b) plans in practice in accordance with the final 403(b) regulations.

Download more information about 2009-3 (269K file).

The results of a July 2008 survey of ASBO members by LIMRA International (an association providing market consulting and research to life insurance and financial services companies) indicated that many school districts were not at that time ready with their written plans. Now is the time to address your district's plan!

ASBO Asks IRS to Delay Effective Date - Submitted October 28, 2008

ASBO International submitted a comment letter to the IRS detailing the difficulties faced by our constituents in attempting to comply with the new 403(b) regulations and requesting a delay of the January 1, 2009 effective date.

Download the IRS Comment Letter as a .PDF document (270K file).

U.S. Government Accountability Office Seeks Information from ASBO International

Known as the "investigative arm of Congress," the U.S. Government Accountability Office (GAO) turned to ASBO on August 26. GAO researchers are conducting a study on retirement plans in the K-14 education sector. During the discussion about plan fees and oversight, ASBO also communicated the deepening concerns among school business officials over their new responsibilities for 403(b) compliance, especially amidst strained school budgets.

Comment Letter to the IRS - Submitted April 10, 2008

In response to member concerns, ASBO's Retirement Plan Council submitted a comment letter to the IRS requesting clarification and guidance on a number of statements in IRS Rev. Proc. 2007-71 that have been causing confusion.

Download the IRS Comment Letter as a PDF document (164K)

IRS Releases New 403(b) Revenue Procedure

Released in advance of its December 17, 2007 publication in the Federal Register, IRS Rev. Proc. 2007-71 provides sample plan provisions that public schools can use to adopt a written plan, or amend an existing plan, to comply with the written plan requirement of the 2007 final regulations. The 31-page Revenue Procedure document addresses key issues such as orphan contracts and corrections for improper contract exchanges.

ASBO's Retirement Plan Council is working on a summary of the Revenue Procedure document, as well as sample 403(b) documents and checklists, so check back regularly.

For updates, check out two pages on the IRS Website, the Retirement Plans Community and the Employee Plans News.