COLLECTED WISDOM™ on 403(b) Plans

A 403(b) tax-sheltered annuity (TSA) plan is a retirement plan, similar to a 401k plan, offered by public schools and certain 501(c)(3) tax-exempt organizations. The following are some resources to help manage and administer your 403(b).

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

Best Practices for 403b Plan Fiduciaries

Abstract: Plan fiduciaries of 403b plans face some unique challenges and making mistakes can expose these fiduciaries to liability. Following 403b fiduciary best practices can help reduce the risk of lawsuits and avoid ERISA compliance violations.

Source: Bsllp.com, August 2018

403b Loose Ends for 2019 Hardships

Abstract: While the Bipartisan Budget Act of 2018 modified the safe harbor rules for hardship withdrawals starting in the 2019 plan year, the extent to which these modifications will impact 403b plans is still subject to open to interpretation.

Source: Ntsa-net.org, August 2018

The Recent NYU ERISA Decision and Best Practices for ERISA Fiduciaries

Abstract: The decision in favor of NYU, and the recent dismissal of two other similar lawsuits against Northwestern University and the University of Pennsylvania, should give some comfort to fiduciaries of ERISA retirement plans, especially those sponsored by higher education institutions. The NYU decision suggests that 403b plans do not necessarily violate ERISA simply because they have a very large number of investment funds, including actively managed funds, or because they do not promptly remove underperforming funds from the plan.

Source: Bsk.com, August 2018

ERISA Fiduciaries Can Learn Lessons From NYU's Victory in 403b Fees Case

Abstract: The NYU's victory was the first to come after a trial, and the court's finding of facts and conclusions of law provide lessons for ERISA fiduciaries and not just those embroiled in their own fee cases.

Source: Greensfelder.com, August 2018

Court Finds in Favor of NYU in 403b Plans Lawsuit

Abstract: A federal district court judge found that "while there were deficiencies in the Committee's processes -- including that several members displayed a concerning lack of knowledge relevant to the Committee's mandate -- ;plaintiffs have not proven that the Committee acted imprudently or that the Plans suffered losses as a result."

Source: Planadviser.com, August 2018

Matrix Trust Company Accused of Making Unauthorized Transfers of 403b Plan Assets

Abstract: Plan participants have filed a lawsuit against Matrix Trust Company for making several transfers to an unauthorized account held by recordkeeper Vantage Benefits Administrators.

Source: Planadviser.com, July 2018

GWU Tells Court 403bs Cannot Be Compared to 401ks

Abstract: In a brief supporting a motion to dismiss a case against George Washington University related to the management of its 403b plan, the defendants note that 403bs have always looked differently and were set up for a different purpose than 401k plans.

Source: Plansponsor.com, June 2018

The Differences Between 403b and 401k Pricing

Abstract: 403b plans are fundamentally different than 401k plans. Many of these differences result in a greater amount of work required to administer 403b plans and more work equals more money. This article looks at a few of the major 403b plan price drivers that do not exist in 401k plans.

Source: Cammackretirement.com, June 2018

403b Plans and Puerto Rico

Abstract: Suppose your pre-approved 403b plan does not exclude residents of Puerto Rico, but your PPA defined contribution plan does. What do you do? Susan Diehl discusses what can be done in such a situation.

Source: Ntsa-net.org, June 2018

Top 10 Issues Found in 403b Plans

Abstract: Compiled from lists published by the IRS, DOL and auditors, here are 10 items to check and review to make sure your 403b plan is operating in line with IRS and DOL expectations.

Source: Qbillc.com, June 2018

Northwestern University Defeats 403b Lawsuit

Abstract: A federal judge in the Northern District of Illinois recently dismissed a lawsuit against Northwestern University alleging that the University and its fiduciaries mismanaged its retirement and voluntary savings plans. This is the latest decision in a series of class action lawsuits against prominent universities in which plaintiffs allege fiduciary violations of ERISA.

Source: Employeebenefitsblog.com, June 2018

Deadline Looming in the Distance for 403b Plans

Abstract: Last year when the IRS announced that the initial remedial amendment period for 403b plans will end March 31, 2020, the natural reaction to this very important (but rather remote) deadline was to immediately put it on the to-do list, somewhere near the bottom, where it has been languishing ever since. If this describes your reaction, it's time to move it to the front burner and take some action.

Source: Benefitsbryancave.com, June 2018

Northwestern University Beats Jerry Schlichter 403b lawsuit

Abstract: Northwestern University has become the second college to beat back allegations of retirement-plan mismanagement, prevailing in a lawsuit brought by prominent plaintiffs' attorney Jerry Schlichter.

Source: Investmentnews.com (registration may be required), May 2018

Northwestern University 403b Lawsuit Tossed By District Court

Abstract: Defendants strongly prevailed with their motion to dismiss, and the Illinois District Court barred further motions as moot: The complaint was far too general in its scope and allegations to move ahead.

Source: Planadviser.com, May 2018

Paying "Reasonable" 403b Plan Expenses

Abstract: One of the perennial issues facing the sponsors, participants and fiduciaries of 403b plans, as well as the consultants servicing or advising such individuals or plans, is plan expenses. Section 403b plans, particularly those that are covered ERISA, must carefully watch what they spend with their limited resources.

Source: Ntsa-net.org, May 2018

University of Chicago Settles 403b Lawsuit for $6.5 Million

Abstract: The University of Chicago has agreed to settle a retirement-plan lawsuit for $6.5 million, becoming the first of about 20 prominent universities facing allegations over 403b-plan mismanagement to take such a step. Observers say it's difficult to determine if this is a harbinger of the outcome in the roughly 20 outstanding lawsuits.

Source: Investmentnews.com (registration may be required), May 2018

The IRS Has a 403b MEP Problem

Abstract: There has been increasing interest in the market to put together Multiple Employer Plans for 403b plans, and with good reasons. Tax exempt entities are well suited to the sorts of economies of scale that a MEP can bring, and they often organize well around common associations. But a 403b MEP is really complicated when you get down to it because -- like anything 403b, it seems -- the devil exists in the details.

Source: Ntsa-net.org, May 2018

Third Parties Weigh in on 403b Litigation

Abstract: Three briefs were filed with the US Court of Appeals for the Third Circuit in support of the University of Pennsylvania and its Investment Committee. The briefs support the assumption that 403b plans have traditionally been managed differently than 401k plans, and as a result, they cannot be viewed in the same light with respect to litigation.

Source: Sentinelgroup.com, May 2018

The New 403b Plan Documents: Protecting Your Clients

Abstract: Less than two years remain until the date by which 403b plan sponsors which seek to self-correct plan provisions that violate the Internal Revenue Code can do so. An April 18 NTSA webinar discussed what some employers are doing to correct errors and make restatements by that date certain.

Source: Ntsa-net.org, April 2018

Brief in University of Pennsylvania 403b Lawsuit Points Out Differences From 401ks

Abstract: An amici curiae brief filed by the American Council on Education and other higher education associations details the history of higher education 403b plans. The Council points out that the retirement system for higher education has always looked different than the system for industrial, corporate America.

Source: Plansponsor.com, April 2018

Ignore Those Form 5500 Instructions: 403b Plans Do Not Use Form 5330 for Late Deposits

Abstract: One of the continuing confusions in how 401a rules apply to 403b plan involves the reporting rules related to the correction and reporting on the 5500 of one of the most common errors in any elective deferral plan: the late deposit of those deferrals into the plan. Neither non-ERISA or ERISA 403b plans will ever file a Form 5330. Ever. Even when the VFCP program is being used to correct the late deposit.

Source: Businessofbenefits.com, April 2018

The IRS's Gradual Shift on Applying 415 Limits to 403b Plans

Abstract: There is a little noticed change in the IRS's recent update of Publication 571 (which is the IRS's 403b technical guide). In a highlighted box on page four is a statement on how the limits on "annual additions" -- otherwise known as the 415 limits -- apply. This innocuous statement is pretty outstanding, finalizing a quiet morphing over a generation of the way the IRS applies a regulation in a way we rarely see.

Source: Businessofbenefits.com, March 2018

The IRS Has a 403b MEP Problem

Abstract: There has been increasing interest in the market to put together Multiple Employer Plans for 403b plans, and with good reasons. But a 403b MEP is really complicated when you get down to it because -- like anything 403b it seems -- the devil that exists in the details.

Source: Businessofbenefits.com, March 2018

Litigation Against 403b Plan Fiduciaries

Abstract: The purpose of this article is to provide a brief overview of 403b plans, discuss when such plans are subject to ERISA, review the key allegations raised in ERISA breach of fiduciary duty lawsuits, and discuss the status of these cases.

Source: Groom.com, March 2018

Audit Guidelines on Missing Participants and RMDs

Abstract: This memorandum directs EP examiners not to challenge a 403b plan as failing to satisfy the required minimum distribution (RMD) standards under Internal Revenue Code Section 403(b)(10) in the circumstances set forth.

Source: Benefitsforward.com, March 2018

IRS Extends RMD Audit Guidelines for Missing Participants to 403b Programs

Abstract: The IRS has extended to section 403b programs the audit guidelines for required minimum distribution failures due to missing participants and beneficiaries that were accorded in an October 2017 memorandum to "qualified plans."

Source: Us.eversheds-sutherland.com, March 2018

Basic Due Diligence for ERISA 403b Plans

Abstract: It is important for 403b plans to review, with their legal counsel, any fiduciary responsibilities they may have under state law. There can be benefit from having knowledge regarding ERISA and utilizing some of the provisions that would be beneficial to their plan. This article examines some basic areas for review.

Source: Ntsa-net.org, March 2018

Compliance Checklist 2018 for Plans That Are Subject to ERISA

Abstract: This 43-page Compliance Checklist incorporates defined benefit, defined contribution, and ERISA 403b requirements and provides information on the materials that will need to be file, filing due dates, and agencies to which the filings should be made.

Source: Prudential.com, February 2018

Georgetown University Hit With 403b Excessive Fee Suit

Abstract: The suit alleges that rather than "...leveraging the Plans' substantial bargaining power to benefit participants and beneficiaries, Defendants failed adequately to evaluate and monitor the Plans' expenses and caused the Plans to pay unreasonable and excessive fees for investment and administrative services."

Source: Ntsa-net.org, February 2018

Bipartisan Budget Act of 2018 Brings Changes for Retirement Plans

Abstract: The Bipartisan Budget Act of 2018 was passed into law on Feb. 9, 2018 and introduces some unexpected changes for retirement plans. The most significant of the Act's changes for retirement plans reduces the existing restrictions on hardship distributions from 401k and 403b plans.

Source: Icemiller.com, February 2018

Funds, Fees, and Annuities, a Guide to 403b Investment Options

Abstract: Unlike qualified plans under Section 401, 403b plans are restricted to only three investment options. This article discusses the differences between these three options (annuities, custodial accounts, and retirement income accounts) including their legal definitions, permitted investments, asset commingling, contract exchanges and transfers, distributions, excise taxes, and fees.

Source: Greensfelder.com, February 2018

Which Employees Are Eligible for a 403b Plan?

Abstract: This is a quick review of which employees are eligible for a 403b plan.

Source: Qbillc.com, February 2018

A (403b) Plan to Resolve Conflicts

Abstract: An employer with a 403b plan must have a written plan that identifies the plan's investment arrangements in order to satisfy the IRS regulatory requirements. But what happens if the terms of the 403b plan document conflict with the provisions of an investment arrangement identified in the 403b plan?

Source: Ntsa-net.org, February 2018

2018 403b Compliance Calendar

Abstract: This 403b Retirement Plan Compliance Calendar highlights critical compliance deadlines for defined contribution retirement plans. While we have covered all of the major dates, some may only apply to particular plan types (and are noted accordingly) and there may be additional deadlines for specific plans that are not covered here.

Source: Cammackretirement.com, January 2018

Transfers from a Non-ERISA 403b to an ERISA Plan

Abstract: Can a non-QCCO (qualified church-controlled organization) transfer assets to an ERISA 403b plan from a non-ERISA 403b that is part of a multiple employer plan and is not the lead employer in the MEP but a participating one?

Source: Ntsa-net.org, January 2018

Vanderbilt Can't Shake Suit Over Retirement Plan Fees

Abstract: Vanderbilt University is the latest school to lose an early round in litigation challenging the fees and investment options in its retirement plan. A federal judge on Jan. 5 largely refused to dismiss a proposed class action accusing the school of running a retirement plan with excessive administrative fees, too many service providers, and high-fee investment options.

Source: Bna.com (registration may be required), January 2018

Fee Structure and Evaluation in 403b Plans

Abstract: This 13-page PSCA 403b Snapshot Survey reflects responses from 250 not-for-profit organizations that currently sponsor a 403b plan. The survey was conducted online in October/November 2017 and asks sponsors questions regarding how plans fees are structured, administered, and evaluated.

Source: Psca.org, December 2017

Survey: 403b Sponsors Need More Information on Their Plan Design

Abstract: PSCA's annual survey shows that 403b plans have made significant improvements in plan administration. This snapshot survey highlights how additional focus evaluating fees and expenses as well as implementing a prudent, documented process might help to mitigate the risks plan fiduciaries face.

Source: Principal.com, December 2017

403b Loans: Maximums and Cure Periods

Abstract: In 2017, the IRS issued two memoranda regarding 403b plan loans and how those loans should be administered. First, in April, the IRS presented two different options to calculate loan maximums under Internal Revenue Code Section 72(p). The second IRS memorandum focused on cure periods. This article reviews the details.

Source: Ntsa-net.org, December 2017

2017 Plan Year-End Compliance Reminders

Abstract: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This publication identifies the materials you need to review and will help you prepare for year-end. It only applies to qualified defined contribution plans and 403b plans that are subject to ERISA.

Source: Prudential.com, December 2017

Delinquent 401k and 403b Deposits: Same Prohibited Transaction, But Only One is Subject to Penalties

Abstract: The IRS Code Section that assesses a penalty on delinquent deferrals, Code Section 4975, does not apply to 403b plans. Unlike parents, who must be fair to all their children and treat them the same, the government doesn't have to penalize all types of plans equally when they commit the same exact prohibited transaction.

Source: Belfint.com, December 2017

Proprietary Funds: The New Lightning Rod for 403b Plans?

Abstract: In the large 403b plan space, the criticism of variable annuities has all but evaporated, since, with some low-cost exceptions, variable annuities no longer exist. But recent litigation has been highly cynical of recordkeepers' proprietary fund offerings and the plan sponsors who select such offerings.

Source: Cammackretirement.com, December 2017

Colleges and Universities Seek Expert DC Advisers for Plan Refinements

Abstract: Transamerica has published an updated annual survey of higher education plan sponsors, finding many are beginning to adopt the retirement plan features shown to be popular in the corporate sector. Survey finds higher education institutions "made a marked increase in the adoption of automatic enrollment (67%) and automatic deferral rate increases (36%) for participants."

Source: Planadviser.com, November 2017

University 403b Plan Fees and Investments Under Scrutiny

Abstract: Over the past year, 16 private universities became the target of lawsuits alleging breaches of fiduciary duty with respect to 403b plan fees and investment options. This article reviews some of the key topics covered by the allegations in the cases grouped by trends in the district courts' rulings to date.

Source: Hodgsonruss.com, October 2017

Reach Out to 403b Participants Maintaining Outside Businesses

Abstract: Notifying 403b plan participants of annual additions limit rules under Internal Revenue Code Section 415(c) may not be just a best practice, it may be an affirmative obligation in the employer's 403b plan document.

Source: Ntsa-net.org, October 2017

Who Are the Top 403b Providers?

Abstract: Large nonprofits like hospitals and universities may have ample staff to thoroughly research potential 403b providers. They may even have the capability to administer the plan, and monitor the investments. Small nonprofits, however, may struggle to find time to even look for a provider, much less handle tasks associated with a retirement plan. Nonprofits unsure of just how to go about a search may simply contact one of the larger 403b providers. The biggest 403b players are presented below here.

Source: Forusall.com, October 2017

Dismissal of Case Against UPenn Good News for 403b Plan Sponsors

Abstract: Colleges and universities have finally received some encouraging news in the recent spate of class action suits against higher education 403b plans. Last week a federal judge dismissed all claims against the University of Pennsylvania, marking the first time that one of these recent law suits has been be dismissed in full.

Source: Employeebenefitsupdate.com, September 2017

Lawsuits Targeting 403b Plan Fiduciaries

Abstract: Fiduciaries of 403b plans are increasingly facing the same type of litigation that mirrors other retirement plan fiduciary lawsuits. This results in fiduciaries facing liability from plan members even without the stricter ERISA standards.

Source: Bsllp.com, September 2017

When Must Discretionary Amendments to a 403b Plan Be Adopted?

Abstract: The Remedial Amendment Period for 403b plans ends on March 30, 2020 for plan sponsors using IRS pre-approved 403b plan documents. One of the many issues relating to the RAP is determining what errors can be fixed during the RAP. In particular, what happens if a plan sponsor changed the operation of the plan but did not adopt an amendment reflecting that change?

Source: Relius.net, September 2017

University of Pennsylvania Wins Dismissal of Case Against 403b

Abstract: U.S. District Judge Gene E. K. Pratter of the U.S. District Court for the Eastern District of Pennsylvania dismissed all claims against the University of Pennsylvania and its vice president of human resources. The case had challenged multiple recordkeepers, multiple investment options and the use of retail share class funds.

Source: Planadviser.com, September 2017

Collective Investment Trusts and 403b Plans: An Update

Abstract: It may be possible for CITs to be offered in a governmental 403b plan (the limitations on being able to offer CITs in a private tax-exempt 403b plan remain applicable), if certain conditions are met.

Source: Cammackretirement.com, September 2017

Pre-approved 403b Plans -- Effective Date Addendum

Abstract: Adopting employers may use an effective date addendum to depict plan operational changes that have occurred at different points in time, which otherwise wouldn't be accurately reflected by the plan's general effective date.

Source: Irs.gov, September 2017

What You Need to Know About 403b Loans

Abstract: If you find yourself in a tight spot financially, then in some cases you might be able to borrow money from your 403b retirement account rather than taking an early distribution or using higher-interest debt. However, retirement accounts shouldn't be treated like bank accounts and one should borrow with caution.

Source: 403bwise.com, September 2017

403b Plans Must Be Universally Available -- Is Yours?

Abstract: Plan sponsors sometimes run into confusion regarding which employees may be excluded from making salary deferral contributions under their plan. This article discusses the rules to help clarify which employees may be excluded.

Source: Eisneramper.com, September 2017

403b Litigation Concerns

Abstract: Over the last year, many colleges and universities have been the subject of lawsuits over the management of their 403b retirement plans. The complaints in the lawsuits have common threads and they identify patterns of high-risk practices. The courts have begun to weigh in on some of these issues, but their interpretations of the issues vary.

Source: Sentinelgroup.com, September 2017

Are 403b Plans Evolving Fast Enough?

Abstract: Traditionally 403b plan sponsors have been uncomfortable with change, at least much more so than their 401k plan sponsor counterparts. But while 403b plans have lagged in adoption of some plan improvements, they're striving to catch up.

Source: Principal.com, September 2017

SEC Accuses 403b Plan Advisory Firm of Conflicts-of-Interest

Abstract: The SEC has instituted a cease-and-desist order against Envoy Advisory. Envoy is accused of breaches of fiduciary duty, inadequate disclosures and compliance deficiencies. Most of its clients are small to medium-sized non-profit, faith-based organizations that sponsor ERISA Section 403(b) retirement plans for employees.

Source: Planadviser.com, September 2017

How to Do a 403b Collective Trust

Abstract: The University of California made news when it announced that it has found a way to apply the collective trust rules in such a way to make just such an offering to its 403b plan. For sophisticated state universities with large plans, or even those large consolidated K-12 plans, this could be a very real option.

Source: Businessofbenefits.com, September 2017

Can 403b Plans Now Invest in Collective Investment Trusts?

Abstract: The University of California becoming the first 403b non-church plan sponsor to offer collective investment trusts in its 403b plan. This development was somewhat surprising, given the fact that non-church 403b plans are generally restricted to investing in 403(b)(1) fixed/variable annuities and 403(b)(7) custodial accounts, and most CITs are neither.

Source: Cammackretirement.com, September 2017

New Pre-Approved 403b Retirement Plan Restatement Period Now Open

Abstract: Sponsors of 403b retirement plans received welcomed news from the IRS in 2013 that it would allow them to adopt a pre-approved 403b plan. This means that for the first time, employers can adopt a written 403b plan document that the IRS has reviewed and approved. While more than three years have passed since the IRS announced this change, the time to take advantage of this new opportunity by adopting a pre-approved 403b retirement plan document has finally arrived.

Source: Wnj.com, September 2017

403b Tax-Sheltered Annuities

Abstract: Revised 4-page IRS document that looks at common 403b plan mistakes and IRS products (including the 403b Fix-It Guide), services, and assistance to help you keep your 403b plan healthy.

Source: Irs.gov, August 2017

More 403b Plans Offering Target-Date Funds as QDIA

Abstract: Target-date funds grew in popularity among 403b plans last year as more plans offered this option as a qualified default investment alternative, according to a report just issued.

Source: Pionline.com, August 2017

New Report Highlights 403b Retirement Plan Trends

Abstract: nonprofit organizations surveyed saw noticeable improvements in investment selections and auto-plan design features, such as increased default deferrals. The percentage of plans with a default deferral rate of more than 3 percent increased from 21.6 percent to 34 percent. In addition, organizations saw average employer contributions increase to 5 percent, up from 4.7 percent in 2015.

Source: 401khelpcenter.com, August 2017

403b Plans Improving Plan Design

Abstract: In a survey of 608 non-profit organizations conducted by the Plan Sponsor Council of America, the council found these non-profits are making improvements to their 403b plans, particularly with respect to auto-plan features.

Source: Plansponsor.com, August 2017

Why Some 403bs May Delay Form 5500 Filing

Abstract: Many retirement plan sponsors, including 403b plan sponsors, file an extension of time to file their Form 5500s. This article discusses the two primary reasons.

Source: Plansponsor.com, August 2017

New Jersey Considers 403(b) Disclosure Bill

Abstract: A bill that would require new disclosures in New Jersey, A5151, has been filed by Assemblywoman Amy Handlin, the Deputy Republican Leader of the Democrat-controlled Assembly.

Source: Napa-net.org, August 2017

Why Do I Need to Restate My 403b Plan Document?

Abstract: All organizations sponsoring 403b plans must now "restate" their plan documents onto an IRS approved document by March 31, 2020. Restatement on an IRS pre-approved plan gives the sponsoring organization reliance that the provisions in the pre-approved plan are compliant with IRS rules and regulations and that the plan assets are protected from taxation.

Source: Qbillc.com, July 2017

New 401k Pre-Approved Document Rules Suggests Path to Address 403b Document Challenges

Abstract: Buried in that Rev Proc 2017-41 is something we have been looking for in the 403b space, which actually would help alleviate some of the concerns document drafters have with these long-standing plans.

Source: Businessofbenefits.com, July 2017

Action Steps to Protect Your 403b Plan

Abstract: Employers sponsoring 403b plans should take steps now to ensure compliance with Internal Revenue Service rules to protect plan participants against adverse tax consequences. Failures that are not timely corrected could result in the 403b plan's loss of tax-advantaged status, which would mean immediate taxation of all benefits to participants. This is a suggested action plan for employers.

Source: Icemiller.com, July 2017

Non-ERISA 403b Plans Must Walk Fine Line to Avoid Losing ERISA Exemption

Abstract: Last month's Supreme Court decision, Advocate Health Care Network v. Stapleton, upholding ERISA exemption for church-affiliated pension plans was a reminder that not all benefit plans are subject to ERISA. Indeed, non-profit employers who sponsor 403b plans can choose to be exempt from ERISA. But they have to tread carefully.

Source: Retirementplanblog.com, July 2017

Connecticut 403b Fee Disclosure Law to Take Effect Oct. 1

Abstract: Beginning Oct. 1, 2017, administrators of 403b plans run by political subdivisions in the Nutmeg State will have to disclose to the plan's fiduciary any conflict of interest the service provider has with the plan.

Source: Ntsa-net.org, July 2017

Texas Board Aims to Kneecap 403b Participant Choice, Providers

Abstract: The Texas Teachers Retirement System Board of Trustees published a proposed rule in the Texas Register that could eliminate virtually all of the existing registered 403b products in the state from being actively marketed under new salary reduction agreements.

Source: Ntsa-net.org, June 2017

Key Questions to Ask to Better Understand Your 403b

Abstract: While 403bs share some similarities with the 401ks offered to corporate employees, these retirement plans are not identical and they can sometimes be confusingly complex in their fee structures and investment options.

Source: 403bwise.com, June 2017

Adopting a New Pre-Approved 403b Document? It's a Good Time for a Plan Compliance Review

Abstract: The restatement of a plan onto a pre-approved document is an opportunity to review the operation of the plan and to make sure that it is being administered in accordance with the terms of the document and applicable legal requirements. Conducting a periodic compliance review is a good idea even if the plan is not being restated, but a plan sponsor certainly wants to make sure that any current errors in the plan's operation are not carried over to a new document.

Source: Boutwellfay.com, June 2017

Why the Fiduciary Rule Applies to IRAs but Not Non-ERISA 403bs

Abstract: Aren't IRAs exempt from ERISA and thus any of ERISA's fiduciary provisions? And what about the many 403b plans that are also not subject to ERISA? If the fiduciary does not apply to those plans, why would it apply to IRAs?

Source: Plansponsor.com, May 2017

403b Plan Design and Operation

Abstract: This wide-ranging guide discusses the rules that apply when eligible tax-exempt organizations establish tax-sheltered annuities, custodial accounts, or retirement income accounts, as described in Section 403b of the Internal Revenue Code (403b plans).

Source: Benefitsattorney.com, April 2017

Iowa Bill to Open Teachers' 403b Plan to More Competition

Abstract: The bill requires the Iowa Department of Administrative Services to include up to 30 insurance and investment companies in the 403b plan so long as they are approved by the Iowa Insurance Division and registered with the federal Securities and Exchange Commission.

Source: Ntsa-net.org, April 2017

PODCAST: Assessing and Improving Practices Regarding Investment of Retirement Plan Assets

Abstract: Verrill Dana Employee Benefits attorneys Eric Altholz and Chris Lockman provide a brief update on class action lawsuits alleging various breaches of fiduciary duties under ERISA pending against a dozen major universities. About 16-minutes.

Source: Employeebenefitsupdate.com, April 2017

When to Expect 403b Pre-Approved Plans

Abstract: The IRS was expected to issue approval letters for the model 403b plan documents in early 2017. However, the IRS has neither done so yet nor provided any update on when that may happen.

Source: Plansponsor.com, March 2017

Consequences of Adopting an ERISA 403b Plan

Abstract: Suppose a financial organization maintains a 403b plan document that is intended for use by an ERISA 403b plan. What are the consequences if the plan talks about being subject to the ADP test and certain nondiscrimination rules?

Source: Ntsa-net.org, March 2017

A Road Map to 403b Transactions

Abstract: It is always good to review transactions, especially the definitions, since saying the wrong thing -- or worse, filling out the wrong form -- could prove disastrous for the plan participant. This is a review of common transactions for 403b plans.

Source: Ntsa-net.org, March 2017

IRS Issues Guidance to Correct Defective 403b Plans

Abstract: The IRS recently issued guidance permitting employers to retroactively self-correct 403b plan document failures through March 31, 2020. In short, employers sponsoring 403b plans have until March 31, 2020 to "clean-up" any plan document failures that occurred during the RAP, retroactive to January 1, 2010.

Source: Icemiller.com, March 2017

Managing Critical 403b Issues through Proper Allocation of 3(16) and 3(21) Fiduciary Responsibility

Abstract: Service providers are demonstrating their ability to customize their fiduciary services to their customers needs and -- just as important -- to their own capacity to provide selected services where they feel they can add value. The complex nature of handling 403b plans make these plans uniquely suited to customized fiduciary services.

Source: Businessofbenefits.com, March 2017

IRS Updates 403b Self-Correction Procedure Info

Abstract: The IRS has updated the portion of its website that addresses how to self-correct defective 403b plan provisions during the remedial amendment period (RAP).

Source: Ntsa-net.org, March 2017

Self-Correct Defective 403b Plan Provisions During the Remedial Amendment Period

Abstract: 403b plan sponsors may self-correct plan provisions that violate the Internal Revenue Code Section 403b written plan rules by adopting plan amendments by March 31, 2020. This correction period is known as the "remedial amendment period." This is updated guidance.

Source: Irs.gov, February 2017

2017 Compliance Checklist for Retirement Plans Subject to ERISA

Abstract: As a retirement plan sponsor, you know how important it is to comply with ERISA and the ever-changing reporting and disclosure requirements mandated by the federal government. This checklist incorporates defined benefit, defined contribution, and ERISA 403b requirements and provides information on the materials that you will need to file, filing due dates and agencies to which the filings should be made.

Source: Prudential.com, February 2017

Remedial Amendment Period for 403b Plans

Abstract: With the release of Revenue Procedure 2017-18, IRS has announced that the last day of the remedial amendment period is March 31, 2020. IRS plans to issue approval letters on the plans that have been submitted by March 31, 2017. Thus, if a plan has not satisfied the requirements of Section 403b with the prototype documents during the remedial amendment period but is amended by March 31, 2020 to satisfy those requirements, the plan will be considered to have satisfied those requirements for the entire period.

Source: Strategicbenefitservices.com, February 2017

TIAA Lawsuit Puts the Spotlight on 403b Participant Loans

Abstract: Participant loans from 401k plans have never been an employer favorite plan provision. Now participant loans from 403b plans have come into focus. It's in the form of a class action law suit recently filed by participants in the Was hington University 403b plan against TIAA. The Plaintiffs allege that TIAA violated several provisions of ERISA regarding the manner in which loans were administered.

Source: Retirementplanblog.com, February 2017

403b's 'Limitation Year' Rules Demonstrate their 'Individual' Nature

Abstract: Even now, as we hear rumblings that a "universal 401k" arrangement may once again be in the wings under any tax reform package considered by the new Congress, we again are reminded on how ingrained the differences are between the various types of retirement plans. There are reasons these plans, and the differences between them, exist. One of the most unusual differences, and hidden, differences between 403b plans and 401k plans is the striking fact that the 415 limit is an individual limit, not a plan level limit.

Source: Businessofbenefits.com, January 2017

Long Awaited IRS Guidance on Initial 403b Remedial Amendment Period

Abstract: The IRS has announced that the initial remedial amendment period for 403b plans to correct plan document defects in form will be open until March 31, 2020. This indicates that the first round of IRS advisory and opinion letters for 403b pre-approved plans will be coming out soon.

Source: Groom.com, January 2017

The Birth of the First Ever IRS Pre-Approved 403b Plan Documents

Abstract: On January 13, 2017, the IRS issued Revenue Procedure 2017-18 which provides Employers with a three-year remedial amendment period (RAP) that ends 3/31/2020. So now we are on our way, but we still have a number of items to receive from the IRS, namely more guidance and of course the actual approval letters. This is the first RAP for 403b documents in the history of these plans.

Source: Ntsa-net.org, January 2017

Can Funds From an Inherited 403b Be Rolled Into an IRA?

Abstract: Suppose an advisor has a 68-year old client whose uncle died, and she directly transferred his 403b account to an inherited IRA. She has her own 403b account and would now like to roll that 403b account into her inherited IRA. Is she permitted to do that?

Source: Ntsa-net.org, January 2017

Correcting the "Best Guesses" on 403b Plan Terms

Abstract: The IRS has announced the end of the first remedial amendment period for 403b plan documents, in Revenue Procedure 2017-18. The last day of that RAP will be March 31, 2020. Now what do you do with it?

Source: Businessofbenefits.com, January 2017

Roth IRA vs 403b

Abstract: You may have a 403b retirement plan available, but all income earners also have the option to save for retirement in a Roth IRA. So, which one makes more sense? This article explains how they work and the differences.

Source: 403bwise.com, January 2017

403b Universal Availability Requirement

Abstract: A 403b plan must satisfy the universal availability requirement with respect to elective deferrals. All employees of the employer must be eligible to make elective deferrals if any employee has the right to do so, with certain limited exceptions. Certain part-time employees may be excluded from eligibility to make elective deferrals.

Source: Irs.gov, January 2017

Last Day of the Remedial Amendment Period for 403b Plans

Abstract: Revenue Procedure 2017-18 provides that the last day of the remedial amendment period for Section 403b arrangements for purposes of Section 21 of Revenue Procedure 2013-22 is March 31, 2020.

Source: Benefitsforward.com, January 2017

Hospital Target in 403b Lawsuit Starts Off the Year

Abstract: Plan participants of Eseentia Health in Minnesota filed a class action lawsuit against the 403b plan sponsor claiming that the organization paid excessive fees to their recordkeepers. Experts are predicting an increasing number of lawsuits, especially against 403b plans which many consider low hanging fruit.

Source: 401ktv.com, January 2017

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