403(b) Plan Document Deadline Approaches. Yellow Flag on Calendar.

403(b) Plan Document Deadline Approaches

403(b) Plan Document Deadline Approaches

Pursuant to final regulations published on July 26, 2007, sponsors of 403(b) plans, (retirement plans operated for employees of public schools, colleges, universities, not-for-profit hospitals and other tax-exempt organizations), were supposed to have adopted written plan documents by January 1, 2009. 

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However, in response to objections from plan sponsors, the IRS issued Notice 2009-3 in December 2008, which provided some relief to 403(b) plans with respect to the requirement to have a written plan in place. The IRS stipulated that it would treat 403(b) plans as meeting the requirements for calendar year 2009, if:

·       The sponsor has adopted a written plan intended to satisfy the requirements by December 31, 2009.

·       During 2009, the plan sponsor operates the plan according to a reasonable interpretation of the applicable Internal Revenue Code section and related regulations.

·       By the end of 2009, the plan sponsor makes its best effort to retroactively correct any operational failures during the 2009 calendar year, in order to conform to the written plan.

Almost a year has passed since the IRS published Notice 2009-3, and now the extended deadline of December 31, 2009 is looming. If a 403(b) does not yet have a written plan document in place, plan sponsors should contact their retirement provider, consultant and/or legal counsel immediately to address the plan document requirement. Even those plans with a written plan document in place should consider outside consultation to ensure the document is current and compliant with all requirements.

Next up: Are you prepared for the expanded Form 5500 reporting and audit requirements?

Lindquist LLP has audited retirement plans, including defined benefit plans, 401(k) plans and other defined contribution plans, for more than 30 years. We audit more than 100 retirement plans annually and are prepared to assist 403(b) plans with the expanded audit and reporting requirements. Contact Partners Barry Omahen or Joe Thiermann at (925) 277-9100 for more information.

Barry T. Omahen, CPA, is Lindquist LLP's managing partner based in the San Ramon office.  Barry specializes in serving the audit, accounting and reporting needs of employee benefit plans and not-for-profit organizations.  He serves as the partner in-charge of the Firm's quality control review and audit and accounting practice.  Please contact him at (925) 498-1546 or bomahen@lindquistcpa.com with questions.

Joseph M. Thiermann, CPA, is a partner based in Lindquist LLP's San Ramon office.  He has 20 years of audit and accounting experience with employee benefit plans and currently serves as engagement partner for 18 defined benefit and defined contribution plans with assets ranging between $5 million and $800 million. Joe also has specialized expertise in benefit claims testing for single-employer welfare plans, multiemployer health and welfare funds and group insurance arrangements and is the partner responsible for Lindquist LLP's claims audit department.  Please contact him at (925) 498-1542 or jthiermann@lindquistcpa.com with questions.

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