By Robert Toth on Posted in 403(b),Complex Prohibited TransactionsOne of the continuing confusions in how 401(a) rules apply to 403(b) 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 403(b) will ever file a Form 5330. Ever. Even when the VFCP program is being used to correct the late deposit.
Adding to the confusion is that the Form 5500 instructions do not differentiate between 403(b) plans and 401(a) plans. It simply states that all "defined contribution" plans need to file the Form 5330 for late deposits, and pay the penalty tax. … Continue Reading
By Robert Toth on Posted in UncategorizedOne of the more intractable issues with which ERISA 403(b) plans sponsors must deal with every year arises from the “policy loans” issued by insurance carriers under the 403(b) annuity contracts held under the plans. There is simply no good way to report these loans on the Form 5500, and the newly proposed Form 5500 changes do not address this ongoing issue.… Continue Reading
By Robert Toth on Posted in 403(b)The real key to making the FAB work for the employer in keeping auditing costs down is in the sensible application of the FAB's 3rd condition. I would suggest that applying it consists of two parts. First, use a reasonable effort to determine and find contracts that were related to the plan at some time in the past and, secondly, making a reasonable effort to determine whether or not the rights under those contracts are "legally enforceable" by the individual.… Continue Reading
By Robert Toth on Posted in UncategorizedRetirement plan vendors throughout the industry are engaging in efforts to prepare for the new disclosure requirements for the 2009 Form 5500 schedules, particularly the disclosures related to direct and indirect compensation under Schedule C and the substantial requirements for Schedule A. I had the pleasure of a couple of informative conversations this week which… Continue Reading
By Robert Toth on Posted in 403(b) BNA reported on August 20th the concerns of the AICPA’s 403(b) Plan Audit Task Force about practitioners "misunderstanding" of the impact of the recently issued DOL FAB 2009-2, where the DOL took steps to alleviate some of the more draconian impacts of the new Form 5500 reporting rules for certain 403(b) plans. Task force members are reported… Continue Reading