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403(b) Plan Document and Compliance Update - YouTube
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welcome to the McAfee and Taft webinar
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series the topic for this webinar 403 B
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plan document and compliance update for
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many years the IRS offered little
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guidance to governmental or tax-exempt
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employers as to the specific plan
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document requirements applicable to 403
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B retirement plans recently however the
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IRS has approved model and prototype
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plan documents that sponsors of 403 B
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plans can adopt to ensure document
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compliance as a result your plan
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document vendor or service provider may
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be contacting you in the next few months
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to offer to restate your plan this
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process may appear to be routine but can
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result in significant exposure to
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liability if not evaluated carefully in
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addition the IRS has indicated that is
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stepping up its audit activity with
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respect to such plans so now is an
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opportune time to get your plan document
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in order and to otherwise review your
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plans compliance in this presentation we
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will discuss the process and deadlines
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for adopting the new pre approved 403 B
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plan documents and provide guidance to
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plan sponsors on how to avoid and
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correct common plan errors our
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presenters are McAfee and Taft employee
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benefits attorneys John pepper onus and
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Jim Prince both represent employers of
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all sizes on matters involving qualified
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retirement plans health and welfare
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plans and executive compensation both
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are frequent speakers and authors on
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employee benefits issues so with those
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introductions I now turn it over to you
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Jim Thank You Brad and thank you
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everyone there for tuning in to this
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webinar 403 B plans are really limited
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to select employers and that includes
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public schools including universities
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and colleges and private charities that
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are qualified under Section 501 C 3 and
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as I mentioned that they're specialized
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plans and they they have a special sort
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of history they didn't arise in this in
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the manner that other retirement type
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vehicles did they
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were more related to insurance products
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beginning prior to the 1950s
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and in in 1958 was the first legislation
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related to 403 B plans which really just
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included a limitation and so 403 B the
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section of the Internal Revenue Code
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that we're that the plans get their name
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started out as simply a limitation on
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the amount that individuals could defer
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from compensation under what were
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referred to as tax sheltered annuity
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contracts so these plans arose from
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these individual insurance type products
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and therefore for many years they were
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not treated in the same manner as other
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retirement plans in that there were no
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specific or comprehensive plan documents
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related to these arrangements and often
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were just covered by individual
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contracts with individual employees so
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from the 1950s until probably the late
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1990s 403 B plans were virtually ignored
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by the Internal Revenue Service at least
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as far as providing guidance as to the
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as to what is required of 403 B plans
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there were no regulations and there were
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a few pronouncements related to 403 B
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plans in the late 90s early 2000 the IRS
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determined that that probably wasn't the
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best approach and proposed regulations a
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fairly comprehensive set of regulations
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for 403 B plans the the regulations
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became final in 2007 and they included a
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requirement that an employer have adopt
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a formal plan document for their 403 B
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arrangements now although they impose
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this requirement that there be a plan
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and that we had regulations then that
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indicated what the plan should include
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there was no
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approval process that we similar to what
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we have with other qualified plans where
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you could submit your plan document for
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a determination letter nor was there any
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were there any pre approved documents
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like we have for 401k and other
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retirement plans so the Internal Revenue
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Service also recognizing that that's a
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problem for employers has now adopted at
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least a pre-approved plan process
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