403(b)

Subscribe to 403(b) via RSS

The 403(b) annuity “policy loan” is much different. The cash from the loan is obtained from the insurer’s general account, and no investment funds are ever liquidated from the participant’s annuity contract. An amount equal to the value of the outstanding value of the loan remains as a “restricted” investment held in one of the annuity contract’s investment funds, or in a separate account specially designed to pay a special rate of interest on that investment. The participant has no access to those funds, and the funds are released over time as the loan (with interest) is repaid to the insurer…
Continue Reading The “Balancing Problem” in Reporting “403(b) Policy Loans” on the Form 5500 Schedule H

Though late deferrals to an ERISA 403(b) plan do need to be reported under the Compliance portion of the Form 5500 Schedule H or Schedule I, Form 5330 cannot be filed-in spite of the silence in the Form 5500 instructions. This is because the Tax Code’s prohibited transaction rules, Section 4975, do not apply to 403(b) plans-even if it is an ERISA 403(b) plan. Form 5330 is only for plans to which 4975 applies.
Continue Reading About Reporting Those Late Deposits to 403(b) Plans…….

A little noticed class action law suit first filed against TIAA-CREF in 2009 is finally coming home to roost for many fiduciaries of 403(b) plans-without many affected plans even having a clue that they have become members of that class action.
Continue Reading Complications for 403(b) Plan Fiduciaries Under the TIAA Class Action: The Striking Impact of LaRue and the Cy Pres Notice

When considering these new plan document rules and the new EPCRS together, there is a massive volume of sometimes difficult detail in the guidance. Much of it is thoughtful, some of it controversial and, I would venture to say, some of it innovative. For example, it ventures into the world of effectively requiring pre-approved plans while staying within its regulatory bounds (as we’ll be discussing in future blogs). The most striking aspect of this effort, however, is what seems to be a newly institutionalized view that 403(b) plans are, in fact, much different than 401(a) plans, and often demands much different treatment.
Continue Reading Bringing Some Sanity to Calamity: 403(b)’s New Document Rules

For 403(b) late adopters of plan documents,the VCP submission is conditioned upon adoption of a plan document which is intended to comply with 403(b); the plan, in operation, must have acted in accordance with a reasonable interpretation of 403(b) during the period of time for which relief is requested; and, for that period, the plan sponsor must have engaged in a compliance review, under which it used its best efforts to find operational problems and to correct them in accordance with the principles under EPCRS. For Audit CAP, this also appears to be the required correction.
Continue Reading The “Best Efforts” Standard of the 403(b) EPCRS

Be prepared to work hard when you need to take a 403(b) plan through the new EPCRS process under Rev Proc 2013-12-as many of you will need to do soon- especially if you have to use the VCP process, or are defending an audit under CAP.It is going to be complicated.This is not necessarily the fault of the drafters of the Rev Proc. They were stuck with a very difficult task: to try to make something which is fundamentally different from a 401(a) plan still fit uniformly into the 401(a) correction scheme.
Continue Reading The New 403(b) EPCRS Rules: Its, Um, Complicated…..

Now with EPCRS, we are told, being on the verge of release, and with 403(b) audits beginning to enter a new, what I would call “normalized” stage, the 2007 regs will truly be put to the test.Where this will have its impact is when you have to drill down and attempt to apply the regs in detail to any particular fact circumstance….
Continue Reading The EPCRS and Audit Test of the 403(b) Regulations

One of the more difficult questions that has arisen under the 404a-5 participant disclosure rules is related to those pesky "old" 403(b) contracts. In the multiple vendor ERISA world, where a number of vendors have been in and out of the plan over decades, the question becomes whether-and to what extent-the 404a-5 disclosures have to…