The Internal Revenue Service recently gave 403(b) plan sponsors an extra year to comply with new requirements.
IRS Notice 2009-3 delayed the requirement for 403(b) plan sponsors to adopt a detailed written plan until Dec. 31, 2009. However, it did not delay the effective date of other requirements contained in Section 403(b) of the Tax Code and other final regulations. The 403(b) retirement plans are generally offered by public schools and tax-exempt organizations.
According to the IRS notice, plan sponsors must still operate 403(b) plans during 2009 in accordance with a “reasonable interpretation” of the 403(b) rules, provided that the sponsor makes its “best efforts” to correct any operational failures during 2009.
To assist plan sponsors and financial advisers, retirement plan consultancy Benefit Plans Plus is offering a free 403(b) Action Plan Workbook to serve as a reference guide to help achieve IRS compliance. The workbook can be downloaded from www.bpp401k.com/additional/403b_workbook-bpp_12_10_08.pdf
The company notes that establishing a record of a plan sponsor’s “best efforts” to immediately comply is important. Penalties for non-compliance may be restricted to individual participant accounts, but failure to meet certain plan rules could also affect all of the participants so that none of the contracts issued under the plan would meet the 403(b) requirements, and all plan contributions and earnings would be taxable.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access