Tuesday, June 9, 2009
A New Day Dawning for 403(b) Plans
Written by: Brian S. Harvey, CPA, Barnes Dennig (Cincinnati)
Major changes are underway to bring filing and audit requirements for 403(b) tax-sheltered annuity plans in line with those of 401(k) plans. If your organization offers such a plan, you'll need to get busy, as changes are effective for taxable years beginning after December 31, 2008.
First, Some Background
Until recently, 403(b) plans were exempt from Form 5500 reporting and audit requirements. But recent amendments to Department of Labor regulations mean that ERISA-covered 403(b) plans are now subject to virtually the same reporting and audit requirements as 401(k)s, including a requirement that plan sponsors maintain written plan documents. (In the closing days of 2008, the IRS extended the deadline for written plan documents from January 1, 2009 to December 31, 2009.)
Why, you may ask? The DOL found violations in 78% of 403(b) plans that they reviewed. They want employers/plan sponsors to take more responsibility and be more accountable for the program they establish.
It is important to note that, while your organization may face significant challenges in meeting these new plan requirements, the process is intended to help ensure the financial integrity of your 403(b) plan and ultimately help secure the retirement income of the employees.
Will You Be Impacted? >>Read the full article.