Topics and Updates

403(b) Regulations…Are You Prepared?

In the past, 403(b) plans have enjoyed very limited administration and reporting requirements. Times have changed, and new regulations require much greater involvement of plan sponsors in the administration of these retirement plans. These regulations have the effect of making 403(b) plans more like 401(k) plans.

The regulations will have a significant impact on Section 501(c) tax-exempt organizations and public schools that sponsor 403(b) retirement arrangements for their employees. Accordingly, these regulations will affect sponsors, administrators, participants and beneficiaries.

In addition to becoming familiar with a host of new reporting and audit requirements, plan sponsors need to answer some fundamental questions:
Is your 403(b) plan subject to ERISA?
Do you maintain a current plan document and investment policy statement?
Are your participant records complete and accurate?
Is your plan subject to nondiscrimination rules?
Are you meeting your plan fiduciary responsibilities?
Does your plan have 100 or more participants, thereby requiring an audit?

If you answered ‘yes’ or are unsure of the answer to any of these questions, your employee benefit plan may be required to complete an audit or file Form 5500 Annual Return/Reports, and distribute a compliant summary plan description (“SPD”) to all participants. You may also have additional fiduciary responsibilities as plan sponsors, administrators, and/or trustees.

The first required audit is for years beginning in 2009, which equates to an audit actually being performed sometime in mid-2010. Note that 403(b) plans have never been required to retain accounting records before, and some organizations may very well face difficulty in properly accumulating all plan participant accounts so that they can perform a full accounting.

If you need assistance with your 403(b) reporting, our experienced professionals can work with you to identify the most cost effective ways to comply with filing and audit requirements for your plan. The key is to not wait to gather information for your plan, but to be proactive.

We would welcome the opportunity to discuss how we might help you. For a free consultation regarding your 403(b) plan, contact Ryan Blaney at 812-288-6621 or Ryan_Blaney@mnccpa.com.

thematic move

A move that is consistent with
the player's overall strategy.

strategy

The overall, long-range plan.

shot

A strong, unexpected move.

critical position

The point in the game where
the decisive series of moves begin.

initiative

The advantage held by the
player who is in a position
to control the direction
of the game, forcing the
opponent to play defensively.

Copyright © McCauley, Nicolas & Company, LLC. All rights reserved. Revised: 09/30/09.