Tuesday, September 24, 2013

IRS Establishes Program for Pre-Approved §403(b) Retirement Plan Documents

What Plan Sponsors Need to Know

The Internal Revenue Service (IRS) issued regulations governing §403(b) retirement plans in 2007 that generally became effective January 1, 2009, requiring that all such plans, whether subject to the Employee Retirement Income Security Act (ERISA) or not, be maintained pursuant to a written plan. However, with few exceptions, plan sponsors could not be sure that their plan document met the §403(b) requirements.

In April 2013, IRS issued Revenue Procedure 2013-22, which established a program for the pre-approval of §403(b) plan documents. This article discusses what plan sponsors need to be aware of regarding the pre-approved plan document process. 

For most organizations, a written plan document had to be in place by January 1, 2010 (a one-year extension was available for certain plans maintained by church organizations). Unfortunately, the regulations did not offer any direction as to the content of the document; thus, plan sponsors had no assurance that the document they were using met the requirements of §403(b). Revenue Procedure 2013-22 sets forth the process that investment and service providers should follow to obtain approval for plan documents. Once approved, adopting plan sponsors can then rely on those documents as meeting the §403(b) requirements.

Read the full document for questions and answers to help plan sponsors understand the provisions of Revenue Procedure 2013-22.

If you have any questions about 403(b) plans, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.