One of the natural byproducts of doing a lot of 403(b) work is a necessary familiarity with many of the security law rules which apply to retirement plans. This familiarity is recently becoming handy on the 401(a) side of our business as well, with the SEC showing an increasing interest in all retirement plans. The
403(b)
Do 403(b) Distributed Custodial Accounts Currently Exist?
By Robert Toth on
Posted in 403(b)
Our blog of May 26 on "Distributed Custodial Accounts" generated a number of comments, which require a bit of a "follow-on." Ellie Lowder, one of the grand dames of the 403(b) world, agreed with my assessment. She mentioned that she had discussions with the IRS on this point. Staff just couldn’t see how distributions of…
The Case For “Distributed Custodial Accounts” From Terminated 403(b) Plans
By Robert Toth on
Posted in 403(b), Lifetime Income
What Happened
One of the biggest disappointments arising from the issuance of the 403(b) regs has been the inability of employers to effectively terminate their plans. At first, the IRS caused quite a favorable stir when it announced that the regs would specifically classify the termination of a 403(b) plan as a distributable event, and…
Green Book Further Outlines Automatic IRA Similarity to 403(b)
By Robert Toth on
Posted in 403(b), Automatic Workplace Pension
The Green Book, published May 11 by the Treasury Department, contains further details on Obama’s workplace pensions first described in his budget proposals (on which we blogged in March). See pages 7-9 of the Treasury report for details.
It really does create a new scheme of individual pensions, much akin to the 403(b) arrangements…
IRS Announcement 2009-34: The 403(b) Prototype Program Takes Shape In a Well Written Way
By Robert Toth on
Posted in 403(b)
Just when I thought I was going to get a chance to talk a bit about annuities again, the IRS drops a bomb: it has proposed the design of its long awaited 403(b) prototype program and List of Required Modifications. Announcement 2009-34 is the description of the prototype program; and the LRMs can be…
The Lost Souls of 403(b): 2009 Form 5500, Participant Counts and the DOL
By Robert Toth on
Posted in 403(b)
Evan and I spoke at the ALI-ABA’s Advance Law of Pensions this past week in San Francisco, probably the leading seminar for experienced employee benefit lawyers in the country. Our topic was "Getting Over The Hump," a 403(b) guide for the non-403(b) practitioner. We’re checking with ALI-ABA for permission to publish our paper and PowerPoint…
The 403(b) Regs Unintended Consequence: The Freezing of Loans and Hardships in a Time of Crisis
By Robert Toth on
Posted in 403(b)
One of the most unfortunate and unintended consequences of the new 403(b) regulations is the freezing of hardship distributions and loans from contracts of "deselected" vendors, at a time when these funds are needed the most.
What at first seemed like an almost esoteric, academic discussion of what to do with contracts which were issued…
ERISA Challenges for Non-ERISA 403(b) Plans
By Robert Toth on
Posted in 403(b), Automatic Workplace Pension
We recently blogged on the similarities between the Automatic Workplace Pension being proposed in President Obama’s budget proposal and the original concept of the retirement programs under IRC section 403(b). We noted that while 403(b) programs were initially set up as individual pension plans, it has been the policy of the IRS for over…
The 403(b) Regs Experience Exposes “401(x)” Weakness
By Robert Toth on
Posted in 403(b), Automatic Workplace Pension
There has been a discussion circulating around Washington for a number of years about the value of establishing a simplified Defined Contribution retirement system commonly referred to as "401(x)". This program would create a single defined contribution program with a single set of rules to replace the "alphabet soup" of DC plans currently in existence.…
Marketplace Lessons for Workplace Pensions
By Robert Toth on
Posted in 403(b), Automatic Workplace Pension
I was intending to leave this issue alone for a few weeks, and wait until the Workplace Pension proposal (upon which we blogged a few days ago) had a chance to percolate within the retirement industry. But I had the chance to spend a few minutes with David John (David is a senior scholar at…