403(b) plans

[Guidance Overview] On the Subject of Being a Non-ERISA 403(b)
Excerpt:"Since the final 403(b) regulations in July of 2007, there have been questions about how a non-ERISA 403(b) arrangement may maintain the status of being exempt from ERISA. This article addresses that issue."(McKay Hochman Co.)

[Guidance Overview] Technical Questions and Answers Regarding 403(b) Plans Information Sharing: Minimum and Comprehensive Data Elements, Updated August 25, 2010
Excerpt:"The SPARK Institute created a standing panel, made up of representatives from various member companies that played a significant role in developing the Data Elements. The SPARK Institute and the panel review questions that are submitted and develop answers which are posted . . . . Answers are made widely available in order to assist all organizations that are adhering to the Data Elements Best Practices and to the Remittance and Census Data Elements."(The SPARK Institute)

NAGDCA 2010 Survey of Defined Contribution Plans: Stable Value
Excerpt:"This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities."(National Association of Government Defined Contribution Administrators)

Best Practices for Multiple Vendor 403(b) Plans Form 5500 Data Aggregation. August 2010 Draft Version (PDF)
30 pages. (The SPARK Institute)

SPARK Institute Seeks Input on Proposed Data Standards for In-Plan Income Options
Excerpt:"'The absence of standards for sharing necessary information among the insurance product providers and unaffiliated record keepers [is] an impediment to more widespread access to these products,'said SPARK attorney Larry Goldbrum."(Retirement Income Journal)

[Guidance Overview] Exercising Fiduciary Authority and Control over the Investment Menu in ERISA 403(b) Plans
Excerpt:"In the event the plan's fiduciaries conclude that an investment menu change must be made (e.g., replacement of a problem fund in an asset category), if the provider does not permit such change for contractual reasons or due to a lack of fund availability, the plan sponsor will have little recourse but to move to another provider."(PLANSPONSOR.com)

[Guidance Overview] Relaxed Retirement Plan Loan Disclosures Now Effective
Excerpt:"The exemption applies to an exempt loan to a participant in a qualified plan (e.g., a 401(k) or profit sharing plan), a 403(b) plan or a governmental 457(b) plan."(SunGard Relius)

[Opinion] With Yields Low and Fees High,'Safe'Funds Used in Deferred Compensation Plans May Eat Away at Principal.
Excerpt:"Human-resources directors and finance officers need to look into their 457 and 403b deferred compensation plans. They may be using bond funds and money market funds with fees so high that their participants will likely earn negative returns."(Governing)

In-Plan Roth Conversions, Roth 457 Accounts Expected to Gain Senate Approval
Excerpt:"The Senate may vote this month to let 401(k) and 403(b) plan participants transfer non-Roth amounts to a Roth account in the same plan. However, these in-plan conversions would be allowed only for participants otherwise eligible for a plan distribution."(Mercer)

U.S. Supreme Court to Consider Remedy for Deficient SPD
Excerpt:"To recover benefits based on an inconsistency between an ERISA plan document and summary plan description (SPD), must participants show reliance on the SPD? Is it sufficient to show'likely harm'? Or can participants prevail without any showing of harm? The US Supreme Court will tackle these questions . . . ."(Mercer)

[Official Guidance] Text of IRS Final Regs on Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirements; Disclosure Requirements With Respect to Prohibited Tax Shelter Transactions; Requirement of Return and Time for Filing (PDF)
11 pages. Excerpt:"This document contains final regulations that provide guidance under section 4965 of the Internal Revenue Code (Code), relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties . . . ."(Internal Revenue Service)

The 403(b) Market
Excerpt:"The . . . chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year."(403bwise)

[Opinion] ASPPA and NTSAA Request Relief for Certain IRC ??403(b) Plan Hardship Distributions
5 pages. Excerpt:"ASPPA recommends that the IRS provide relief from the requirements of Revenue Procedure 2007-71 by modifying the requirements for financial hardship withdrawals from contracts held by ???de-selected??? providers."(American Society of Pension Professionals&Actuaries / National Tax Sheltered Accounts Association)

[Opinion] ASPPA and NTSAA Request for Guidance on IRC ?403(b) Plan Terminations
Excerpt:"We believe there is much confusion with respect to the manner in which a liquidating distribution is made when a 403(b) plan is terminated. It is for this reason that we respectfully request that the Service provide guidance . . . ."(American Society of Pension Professionals&Actuaries / National Tax Sheltered Accounts Association)

WEIGH THE COST WITHOUT PAYING THE 403(B) PIPER!
Excerpt:"A few things to consider and explore before heading down the path toward a 403(b) plan termination are: Have you identified all the contracts that the IRS considers'issued as part of the employer plan. . . ."(Robert J. Toth, Jr)

Teacher Attitudes and Beliefs About Teaching Financial Literacy: A Survey of California K-12 Teachers (PDF)
25 pages. Excerpt:"[One of the purposes of the study was] to determine teacher understanding of several core personal finance concepts . . . [including] compound interest, inflation, and risk diversification."(Dan Otter, Owner of 403bWise.com)

[Opinion]'According to the Survey:'The Significance of Details
Excerpt:"It is clear that the 403(b) market is shifting and evolving. It is very important to understand the characteristics of the population of plans surveyed when considering results as they are not created equal and may be facing significantly different challenges when factoring in elements such as ERISA vs. Non-ERISA, multiple vendor vs. exclusive vendor and centralized compliance platforms with active plan sponsors."(Robert J. Toth, Jr)

[Guidance Overview] Plan Distributed Annuities, 403(b) Contracts and the Mandatory Cash-Out Rules
Excerpt:"It goes something like this: Code Section 401(a)(31) contains the direct rollover rules and applies to both 401(a) and 403(b) plans. Oddly enough, this section also contains the mandatory cash out rules which applies to account balances of less than $5,000 (I say'oddly'because 411(a)(11) actually has the old rule, which still exists, which permits the distribution without consent of amounts less than $5,000 from a tax qualified plan) for terminated participants."(Robert J. Toth, Jr)

Podcast: Talking Points: 403(b) Adviser Opportunity
Excerpt:"The Principal's Aaron Friedman discusses opportunities for retirement plan advisers at 403(b) plans and why plan sponsors might need an adviser."(PLANSPONSOR.com)

More 403(b) Plan Guidance in the Pipeline, Say IRS Officials
Excerpt:"The IRS is preparing guidance on termination of 403(b) plans and prototype 403(b) plans, Service officials said during an April 30, 2010 teleconference. The additional guidance reflects questions from plan sponsors and employers after issuance of final regulations."(Wolters Kluwer)

Did You Know the IRS Publishes Transcripts of Many of Its Online Phone Forums for EB Practitioners?
Some of the previous phone forums include links to audio recordings and a copy of the'handout'in addition to a transcript! Three cheers for the folks at IRS Employee Plans. (Internal Revenue Service)

[Guidance Overview] What Does a 403(b) Plan Sponsor Need to Have in Order to Have a Compliant Program?
Excerpt:"Regardless of the help they get from others, the responsibility for compliance ultimately lies with the plan sponsor.'As part of the process of bringing the plan into compliance and keeping it in compliance, [sponsors] have to take their role seriously, including in the process of hiring service providers,'. . . ."(PLANSPONSOR.com)

403(b)s Embracing 401(k) Standards
Excerpt:"Principal Financial Group sponsored Chicago-based Profit Sharing/401(k) Council of America's (PSCA) recently released survey of the 403(b) world. The'2010 403(b) Plan Survey'showed that 57% of plan sponsors made changes to their 403(b) plans because of new regulations. That is a higher percentage than the 41% that said they planned to make changes when the same survey was conducted in 2008."(Investment Advisor)

Basic Requirements and Best Practices for Today's Plan Sponsors (PDF)
8 pages. Excerpt:"This paper provides guidance to help plan sponsors understand their role as a fiduciary, highlights strategies to minimize fiduciary and compliance risk, and discusses the resources and services that a provider such as TIAA-CREF can offer to help them, along with anyadvisors they may have, ensure that their employees enjoy lifetime financial security."(TIAA-CREF)

2010 403(b) Plan Survey Highlights
Excerpt:"11.5 percent of plans have an automatic enrollment feature. Automatic enrollment is more prevalent for large plans (21.9 percent of plans with 1,000 or more participants). 43.5 percent of plans with automatic enrollment have a default deferral of 3 percent of pay and 19.6 percent have a default deferral of 2 percent of pay."(Profit Sharing / 401k Council of America)

Recession no Hindrance to 403(b) Transformation, According to Survey
Excerpt:"The 2010 403(b) Plan Survey from the Profit Sharing/401k Council of America (PSCA) indicated that plan sponsors are adjusting well to the new regulations imposed by the IRS, and that participation and account balances remain high. Sponsored by the Principal Financial Group, the study showed that 56.8% of plan sponsors made changes to their plans because of new regulations -- more than the 41% that had planned to make changes according to the 2008 403(b) Plan Survey."(planadviser)

[Guidance Overview] IRS Handout on 403(b) Plans: Yesterday, Today and Tomorrow (PDF)
27 pages. From the Employee Plans Phone Forum, April 30, 2010. (U.S. Internal Revenue Service)

[Guidance Overview] Technical Questions and Answers Regarding The SPARK Institute's 403(b) Plans Information Sharing: Minimum and Comprehensive Data Elements
Excerpt:"We encourage anyone in the 403(b) plans community that has technical questions about the Data Elements to submit them to us at data-elements.questions@sparkinstitute.org. . . . Questions submitted to us will be reviewed by the panel, and answered through this Q&A site to the extent possible."(The Spark Institute)

[Official Guidance] IRS Publishes Interim Report on Colleges and Universities Compliance Project; Useful Compensation Data (PDF)
79 pages. Part VI of the report contains charts showing the distribution of specific types of benefits provided to one or more of the organization's 6 highest-paid officers, directors, trustees or key employees, including life, disability, long-term care contributions; split-dollar life insurance; loans/credit extension (forgiveness of debt/interest); severance or change of control payments; personal use of organization vehicles; and expense reimbursement (non-accountable plan). Also shows participation in specific types of deferred compensation plans, and describes general compensation policies. (Internal Revenue Service)

Workers Struggle to Deal With Changes to 403(b) Plans
Excerpt:"Many 403(b)s . . . are slashing the number of investment options available to participants and scaling back workers'access to loans and hardship distributions."(Wall Street Journal)

The Efficiency of Pension Menus and Individual Portfolio Choice in 401(k) Pensions
Research paper. Excerpt:"We outline implications for plan sponsors and participants seeking to enhance portfolio efficiency: don't just offer or choose more funds, but help people invest smarter."(University of Michigan Retirement Research Center)

[Guidance Overview] DOL Provides Additional Exemption Guidance for Non-ERISA 403(b) Plans (PDF)
2 pages. Excerpt:"FAB 2007-02 confirmed that a section 403(b) plan would not be treated as a plan maintained by the employer for purposes of ERISA Title I reporting and disclosure requirements (including the Form 5500 filing requirement) simply because the employer adopts formal plan documents, as long as it satisfies the safe harbor exemption requirements. . . . DOL received a number of questions from employers concerning the scope of this exemption. In response to these inquiries, the DOL has now issued FAB 2010-01."(Prudential Pension Analyst)

[Guidance Overview] Employee Benefits Developments April 2010
Articles include Department of Labor Issues More Guidance and Relief for 403(b) Plans; COBRA Subsidy Extended Through May 31, 2010; DOL Issues Model CHIP Notice; DOL Issues Final Rule on Underfunded Multiemployer Pension Plans; Change in Retiree Medical Benefits Does Not Violate ERISA; Retention of Corporate Limited Liability. (HodgsonRuss)

IRS 403(b) Plan Update Phone Forum: April 30, 2010
Excerpt:"The 403(b) presentation will cover the past, present, and near future of 403(b) plans [followed by a brief recap of] the more significant changes brought about by the final regulations including a discussion of the written plan document requirement for 403(b) plans. [There will also be a discussion of] the upcoming Pre-approved Plan program that will, for the first time, allow 403(b) eligible employers to adopt prototype or volume submitter plans that receive an opinion letter or advisory letter, respectively, from the Service."(U.S. Internal Revenue Service)

[Guidance Overview] DOL's Additional Form 5500 Guidance for ERISA 403(b) Plans (PDF)
2 pages. Excerpt:"The DOL's Employee Benefits Security Administration (EBSA) has recently announced new outreach and compliance assistance efforts for ERISA 403(b) plans subject to ERISA. As part of this effort, EBSA is sending letters to administrators of the approximately 16,000 ERISA 403(b) plans to remind them that their 2009 Form 5500 annual reporting requirements have changed and to direct them to various EBSA resources for help in understanding and complying with the new requirements. The letter also directs administrators to a toll-free Form 5500 help desk that is available from 8:00 a.m. to 8:00 p.m. (ET) at 866.463.3278."(Prudential Retirement)

Roth 401(k) Conversions Likely to Be Approved
Excerpt:"Legislation allowing defined-contribution-plan participants to convert plan assets to an in-plan Roth account may be passed into law as soon as the end of next month. Approved by the Senate last month, the American Workers, State and Business Relief Act of 2010 would allow rollover contributions to a designated Roth account inside a 401(k) or 403(b) plan. The bill's counterpart in the House, which was passed in December, doesn't include a Roth conversion provision."(Investment News; free registration required)

[Guidance Overview] Frequently Asked Questions About 403(b) Programs, in Spanish
Preguntas frecuentes. (403bwise)

[Opinion] IRS Continues to Call 403(b) Plans Tax Sheltered Annuity Plans, Why Do They Do This?
Excerpt:"In the latest installment (December 2009) of the IRS document explaining the workings of the 403(b) plan Publication 571 the IRS continues to refer to the plan as a Tax-Sheltered Annuity Plan. Why do they continue to this? After all, I don't believe they call the 401(k) plan an individual stock buying plan. The only logical reason I can think of for this misleading labeling is that technically a contribution to a mutual fund is made through provision 403(b)(7)."(403bwise)

[Guidance Overview] Big Changes to Filing Form 5500 for 2009 Plan Year
Excerpt:"The single biggest challenge is in extensive new disclosure requirements for Schedule C. For the first time, plans with 100 participants or more (large plan filers) must report not just direct compensation but indirect and'eligible indirect'compensation -- and must identify the individuals who received it. Form 5500 and all its related schedules and attachments must now be submitted electronically. ERISA-covered 403(b) plans must now abide by the same reporting requirements as 401(k) plans."(The Vanguard Group, Inc.)

[Guidance Overview] Employee Benefits Developments, March 2010
Excerpt:"A brief look at developments in Employee Benefits law from February and March 2010, including cases, rulings, and opinions."(HodgsonRuss)

[Opinion] ASPPA Request for Transitional Relief for 501(c)(3) Organizations Offering 403(b) Savings Arrangements Inadvertently Subject to Coverage Under Title I of ERISA
7 pages. Excerpt:"On March 18, 2010, ASPPA and NTSAA filed comments with the DOL regarding the'limited involvement'safe harbor exemption from Title I of ERISA for certain 403(b) arrangements offered by 501(c)(3) organizations. Relief was requested for arrangements which may now be subject to Title I as a result of the guidance provided by FAB 2010-01."(American Society of Pension Professionals&Actuaries)

[Guidance Overview] Clarification of Form 5500 Reporting for ? 403(b) Plans
Excerpt:"As ? 403(b) plan administrators and plan auditors prepare to file the 2009 Form 5500 - which, for most plans, will be the initial annual report - the Department of Labor issued new guidance to clarify when certain annuity contracts and custodial accounts can be excluded. Elucidating on the carve-out provided under Field Assistance Bulletin 2009-02, the new guidance makes clear, among other things, that the relief applies to both large and small plans, and applies for 2009 and later reporting years."(Deloitte via BenefitsLink.com)

[Guidance Overview] Preparing for a 403(b) Audit: Some Key Facts You'll Need to Prove to Your Auditor
Excerpt:"This ErisaALERT is the third in a series covering issues facing 403(b) plan sponsors. Our first in the series discussed the rules regarding who is subject to an audit as well as tools available to help you select an auditor. Our second ALERT addressed what to expect from your auditor during the audit process and this issue addresses gathering the data the auditor will need."(ERISA diagnostics, Inc.)

[Guidance Overview] ERISA v. Non-ERISA 403(b)
Excerpt:"In FAB 2010-1, the DOL also provides new guidance to clarify issues in the challenges a non-ERISA 403(b) plan has in remaining exempt from becoming an ERISA 403(b) arrangement. The'reasonable choice'of vendors and investments safe harbor for non-ERISA plan status found in ERISA Regulation 2510.3-2(f) has been clarified in this new guidance."(McKay Hochman Co.)

[Guidance Overview] 403(b) Annuity Plan Guidance for Tax-Exempt Entities
Excerpt:"The new DOL guidance on 403(b) annuity programs reinforces the idea that an employer needs to be very thorough and cautious in determining whether a 403(b) annuity program is subject to ERISA and the Form 5500 reporting requirements. Furthermore, as separate reporting of 403(b) annuity contracts is required for Form 5500 effective with the 2009 plan year, additional time and resources may be needed to identify all 403(b) annuity contracts and to prepare the requisite Form 5500 filings."(Epstein Becker&Green, P.C.)

[Guidance Overview] Updated DOL Guidance for Certain 403(b) Plans (PDF)
2 pages. Excerpt:"This Client Action Bulletin discusses the Department of Labor's updated guidance for sponsors of 403(b) plans, including annual Form 5500 filings for ERISA-covered arrangements and the'safe harbor'regulation for non-ERISA arrangements."(Milliman)

In-Plan Roth Conversions Under Tax Extenders Legislation
Excerpt:"An amendment to a pending Senate bill to extend expiring tax cuts (H.R. 4213) would allow Roth conversions in ?401(k), ?403(b) and eligible governmental ?457 deferred compensation plans that have Roth accounts. (Another amendment to the extenders bill would allow Roth accounts within ?457 plans, which are not provided for under existing law.)"(Tax Management Inc.)

[Guidance Overview] Section 403(b) Arrangements Meet ERISA
Excerpt:"The Department of Labor has issued Field Assistance Bulletin (FAB) 2010-01 clarifying the extent to which pre-2009 contracts no longer receiving employer contributions under a tax-sheltered annuity Section 403(b) arrangement may be omitted from ERISA plan reporting, and when Section 403(b) arrangements are exempt from ERISA under the Department's'safe harbor'regulation. The results are some'do'and'do not'rules for tax-exempt employers who want to minimize or claim exemption from ERISA reporting."(Sonnenschein Nath&Rosenthal LLP)

[Guidance Overview] 403(b) and 457 Plans Face New Compliance Challenges (PDF)
14 pages. Excerpt:"403(b) plans have avoided the focus of regulators since their inception in 1958, enjoying a sort of benign neglect because of their status as individual pension plans. Both the IRS and the DOL have taken steps to address this'neglect'by imposing a series of rules thatpreviously only applied to'employer based'plans, like 401(k) plans. The transition to this new regime is proving to be challenging to all parties involved: plan sponsors, employees and service providers."(Thompson Publishing Group Inc.)

[Guidance Overview] Section 403(b) Arrangements Under ERISA
Excerpt:"The Department of Labor has issued Field Assistance Bulletin (FAB) 2010-01 clarifying the extent to which pre-2009 contracts no longer receiving employer contributions under a tax-sheltered annuity Section 403(b) arrangement may be omitted from ERISA plan reporting, and when Section 403(b) arrangements are exempt from ERISA under the Department's'safe harbor'regulation. The results are some'do'and'do not'rules for tax-exempt employers who want to minimize or claim exemption from ERISA reporting."(Sonnenschein Nath&Rosenthal LLP)

[Guidance Overview] Recent Developments in Employee Benefits and Executive Compensation, by Blank Rome, March 2010
Describes highlights of mental health parity regulation, revision of SEC executive compensation disclosure rules, issuance of model CHIP notice, and additional 403(b) DOL guidance. (Blank Rome)

[Guidance Overview] Clarification of Reporting Relief under FAB 2009-02; Clarification of ERISA-Covered Plan Definition by FAB 2010-01 (PDF)
2 pages; several useful charts summarizing certain aspects of the DOL guidance. Excerpt:"Responding to questions and comments received following publication of FAB 2009-02, DOL clarified whether the following contracts/accounts (generally, that otherwise would meet FAB 2009-02) should be included or excluded on Form 5500: . . ."(Sutherland)

[Guidance Overview] 403(b) Retirement Plan Audits -- Frequently Asked Questions (PDF)
6 pages. Excerpt:"The AICPA 403(b) Plan Audit Task Force has prepared these questions and answers to assist plan auditors and plan administrators (hereinafter used to also refer to the plan sponsors or employers) in implementing the U.S. Department of Labor (DOL) financial statement audit requirements (and subsequent enforcement relief) for section 403(b) retirement plans that are subject to [ERISA]."(American Institute of CPAs, via the SPARK Institute)

The IRS 2010 Guidance Plan: A Look at What's Coming
Excerpt:"Each year the IRS issues a list of its top-priority guidance initiatives for the year, called the guidance plan. The long-awaited list of items was issued in late 2009, and sets forth the plan for issuing much-needed guidance for the July 2009?June 2010 year. . . . A look at a number of provisions from the guidance plan that remain to be addressed, based on the type of plan, will give us an idea of what is in store for the coming year."(Groom Law Group)

Text of DOL Advisory Opinion 2010-01A
Excerpt:"This is in response to your request on behalf of the Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF) (together'TIAA-CREF') for an advisory opinion concerning the reporting of the TIAA'Traditional Annuity'on the Form 5500 Annual Return/Report of Employee Benefit Plan. You ask whether the TIAA'Traditional Annuity'is a fully allocated contract for annual reporting purposes within the meaning of 29 C.F.R. ? 2520.104-44(b)(2) and the Form 5500 Instructions. The answer determines whether the Traditional Annuity accumulations must be reported as plan assets on the Form 5500 and applicable schedules and attachments."(U.S. Employee Benefits Security Administration)

[Guidance Overview] Preparing for the Seismic Shift in 403(b) and 457 Plan Administration (PDF)
14 page overview. Each topic includes a list of associated'Compliance Challenges.'Topics are: Background; Transformation Begins; 403(b) Risks and Challenges; Plan Documentation and Design; ERISA Status; Data Collection; Contracts Purchased and Exchanged Before Jan. 1, 2009; Internal Control, Self Audit and Correction; Non-Tax/Non-ERISA Exposure; (Thompson Publishing Group)

[Guidance Overview] The Impact of New Required Reporting Requirements; 401(k), 403(b) and 401(a) Plans Affected (PDF)
29 pages. Includes excellent listing of the service-providers associated with retirement plans, with descriptions of the services they provide and their associated codes for use Form 5500 Schedule C for the 2009 plan year. (PlanTools(tm), a subsidiary of Fiduciary Risk Assessment LLC)

[Guidance Overview] DOL Updates Guidance for Certain 403(b) Plans (PDF)
2-page discussion of DOL Field Assistance Bulletin 2010-01. Points out that early diligence is wise due to the 2009 plan year 5500 needing to be filed electronically under DOL's EFAST2 protocol. (Milliman)

[Official Guidance] Federal Register Version of Text of DOL Proposed Participant Investment Advice Regulation (PDF)
11 pages. Written comments on the proposed regulations should be submitted to the Department of Labor on or before May 5, 2010. Excerpt:"The Department proposes that the regulations contained in this notice will be effective 60 days after publication of the final regulations in the Federal Register. The Department invites comments on whether the final regulations should be made effective on a different date."(U.S. Employee Benefits Security Administration)

[Guidance Overview] U.S. Department of Labor Provides Guidance on Reporting Obligations of 403(b) Plan Sponsors
Excerpt:"Employers should revisit their plans to determine whether they are subject to the new Form 5500 reporting requirements, which include new audit and reporting obligations."(McDermott Will&Emery)