riding out the storm- 403(b) & 457(b) retirement plan issue
DESCRIPTION
Riding Out the Storm- 403(b) & 457(b) Retirement Plan Issue. Presentation Overview. Public School 403(b) Plan Document Requirements Common 403(b) & 457(b) Errors New Retirement & Savings Initiatives How to Get More Information. GFOASC- 25 Years and Counting. - PowerPoint PPT PresentationTRANSCRIPT
403(b) Program
www.irs.gov/ep
Riding Out the Storm- 403(b) & 457(b) Retirement Plan Issue
403(b) Program
www.irs.gov/ep
Presentation Overview
• Public School 403(b) Plan Document Requirements
• Common 403(b) & 457(b) Errors
• New Retirement & Savings Initiatives
• How to Get More Information
403(b) Program
www.irs.gov/ep
GFOASC- 25 Years and Counting
• Apple Computer Releases the Mac• Michael Jackson’s Hair Caught Fire • First Infomercials Appear• Cosby Show Premiers• Term Cyberspace Coined • First Woman Vice Presidential Candidate
403(b) Program
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The Written 403(b) Plan Req.
• Originally Required 1/1/09
• Revenue Procedure 2007-71- Model Plan For Public Schools
• As of 1/1/09, No IRS Pre-Approved or Determination Letter Program
• Not Everyone Was Ready, So………
403(b) Program
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Notice 2009-3 Issued 12/11/08
• Transition Relief- Written Plan Requirement- 2009 Calendar Year
• Not a Free “Push Back” of Date Written Plan is Required By, Since………..
403(b) Program
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Relief is Based on Plan Sponsor’s Actions!
• Written Plan- Adopted On or Before 12/31/09– Intend to Satisfy 403(b), Including Regulations
• During 2009-Operate In Accordance With a Reasonable Interpretation of 403(b) & New Regulations
• On or Before 12/31/09, Best Efforts Made to Retroactively Correct 2009 Operation To Conform With The Written Plan
403(b) Program
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What are “Best Efforts” for 2009 Corrections?
• Employee Plans Compliance Resolution System (EPCRS) – Rev. Proc. 2008-50 - Section 6 –General Correction Principals– Main Theme = Restoration of Benefits
403(b) Program
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The Written Plan – Essential Elements
• Eligibility (Non-Discrimination Rules)
• Benefits
• Dollar Limitations
• Available Investments
• Time & Form of Distributions
403(b) Program
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• Loans
• Hardship Distributions
• Automatic Enrollment
• After Tax Roth Accounts
The Written Plan – Optional Elements
403(b) Program
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• Elective Deferral Catch-Ups– 15 Year Plus Service– Age 50 or Older
• In-Service Contract Exchanges• Transfers• Termination• 5-Year Post Severance Contribution
The Written Plan – Optional Elements- continued
403(b) Program
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2009 403(b) Compliance• No Written Plan Form Failures in 2009 –
Includes:– Absence of Written Plan or– Amendment of Existing Plan to Comply With
Final 403(b) Regulations
• 2009 IRS Focus – Operational Failures• Notice’s Transition Relief - 2009 Calendar
Year Only
403(b) Program
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Announcement 2009-34• Opinion Letter & Prototype Programs
– Draft Revenue Procedure
– Draft Sample Plan Language
– Request for Comments- June 2009
• Next – Determination Letter Program, and………….
2009-34
403(b) Program
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• Retroactive Remedial Amendments For Years After 2009
• 403(b) EPCRS Modifications
2009-34
Announcement 2009-34
403(b) Program
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Most Common 403(b) Errors
• Universal Availability
• Excess Deferrals- Ordering Rules, Post Severance Sick & Vacation
• Hardship Distributions- Self Certify
• Loan Limits- Multiple Vendors
403(b) Program
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403(b) Hardship Distb. Safe Harbor
• Medical Expense
• Purchase Principle Residence
• Post Secondary Education
• Prevent Eviction
• Funeral Expenses
• Repair of Principle Residence
403(b) Program
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Most Common 457(b) Errors
• Excess Deferrals- Last 3 Years Catch Up, Post Severance Sick & Vacation
• Unforeseeable Emergency Distb- Self Certify
• Loan Limits- Multiple Vendors
403(b) Program
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Unforeseeable Emergency • Sudden or Unexpected Illness or
Accident
• Loss of Property Due to Casualty
• Extraordinary & Unforeseeable Circumstance Beyond Participant’s Control
403(b) Program
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Unforeseeable Emergency cont.
• Severe Financial Hardship-Illness or Accident – Spouse
– Beneficiary
– Dependent
403(b) Program
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Unforeseeable Emergency cont.
• Prevent Imminent Foreclosure or Eviction
• Medical Expense to Include Non-Refundable Deductible
• Funeral Expenses
403(b) Program
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Retirement & Savings Initiatives
• Automatic Enrollment – Rev. Rul. 2009-30- Demonstration of
Automatic Contribution Increases
– Notice 2009-65- Sample language Sponsors Can Adopt
403(b) Program
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Retirement & Savings Initiatives continued
• Tax Refund as Savings Bond – 2010 Simple Check of a Box
– Convert Tax Refund to I Savings Bond
– Future Years Purchase for Children or Grandchildren
403(b) Program
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Retirement & Savings Initiatives continued
• Save Unused Vacation or Similar Leave – Rev. Rul. 2009-31- Annual Contributions
• As Employer Contribution• As Elective Deferral
– Rev. Rul. 2009-32- Similar Contributions At Termination
403(b) Program
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www.irs.gov/ep
• What’s New
• Resources
• Ask Bob Architect!
403(b) Program
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How Can I Find Out More?
403(b) Program
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Ya’ll Come Back Now
Ya’ll Come Back Now