 The regulations issued by the Treasury on 403(b) Tax Sheltered Annuity
Plans were more than forty years in the making, but the January 1, 2009
compliance deadline is less than three months away. We have been working
with nearly 25% of the school employers in California who sponsor 403(b)
plans to assist them with the requirements, but there are still many out there
who have their compliance program still in progress or have not yet started.
Where do you stand today on your program?
If you are behind in your compliance efforts, it is important to consider what you are able to do
between now and January 1, 2009 to make progress and avoid potential issues with the IRS for your
institution or your employees. The IRS has publicly stated their intention to increase the number
audits after the January deadline and to diligently apply the regulatory requirements on plan
sponsor employers. Having implemented a thorough and well thought out 403(b) plan is of paramount
importance towards compliance.
Our suggested action plan steps include:
- Written Plan Requirements
- Conformance with Asset Transfer regulations between plans and accounts
- Provisions for Hardship Distributions, Loan Eligibility, and Qualified Domestic Relations Orders
- Ongoing Administrative and Operational Duties of the Plan Sponsor
- Delegation of Authority
Most sponsors of 403(b) plans do not have the resources or expertise to administer these plans under
the new regulatory requirements, and will therefore need to rely on a third party administrator to
perform the sponsor’s duties. This is why school districts and community colleges have turned to
Envoy’s third party administration services to effectively “TAKE YOU OUT OF THE 403(B)
ADMINISTRATION BUSINESS.”
If you have any questions concerning these regulations, please feel free to contact Robert Hornaday,
President of Envoy Plan Services at Keenan & Associates. Envoy is a third party administrator for 403(b)
plans that is ready to assist our clients in complying with the new regulations and with the added burden
of performing their new complex administrative duties. Robert Hornaday may be reached at
800-248-8858 or rhornaday@keenan.com.
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