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Posted by Diane Caron on Fri, Jan 31, 2020 @ 05:26 PM


With only a few months left, the countdown to the mandatory 403(b) plan document restatement deadline is officially underway. All organizations that sponsor 403(b) retirement plans must restate their plan documents by March 31, 2020, using either the IRS’s pre-approved document or an individually designed plan document.

Not-for-profit organizations have an opportunity during the restatement period to align their retirement plan procedures with their written plan documents to help ensure that their retirement plans are following best practices. Changes may need to be made to the operations of the plan, the provisions in the plan documents or both. The following can help organizations with their review process.

Restatement Recap

Sponsors of 403(b) plans are relatively new to the restatement process. Prior to 2009, the IRS considere9d written 403(b) plans to be in “good faith” compliance until procedures were created for the IRS to approve plan documents. Effective Jan. 1, 2010, 403(b) plans had a newly defined process for submitting plan documents to the IRS for approval. These processes mirrored the guidelines that other types of defined contribution retirement plans [401(k), etc.]  have followed for years.

When the 403(b) plan sponsor submits plans to the IRS for approval, the IRS can pre-approve the plan by issuing an approval letter. The pre-approval provides assurance that the plan language complies with the necessary tax requirements. Once plan sponsors receive their approval letter from the IRS, they will have until March 31, 2020 to restate their 403(b) plans using the pre-approved language (and many recordkeepers have already done this on their client’s behalf).

Preparing for Restatement

Plan sponsors generally need to restate the entirety of their plan every five to six years, however regular review should be part of an annual maintenance process. The plan restatement period, while arduous, is an opportunity to make changes that can help improve plan provisions, administration, and operational compliance. Below are some steps to consider during the final year of the 403(b) plan document restatement period:

Incorporate Interim Amendments

Please note, law changes and other regulatory updates may occur more frequently than the restatement period. When a law change happens, plan sponsors frequently adopt an interim amendment to ensure their plan language compiles with the new requirement. During the restatement period, the 403(b) plan will need to ensure that the plan language incorporates the interim amendment language.

Compare Plan Document to Plan Operations

There should also be no discrepancies between written plan procedures and plan operations. It is important that plan sponsors review all sections of the written plan document, including the definitions of compensation and contribution groups or tiers. Plan participant contributions should also be allocated per the definition in the plan document. Contribution groups or tier descriptions should be clearly defined. If years of services is an input for a contribution group, what is the date that the year of service is measured? The plan year? The hire date? If there is any issue with the definitions and/or executions of a contribution group requirement, the issue should be addressed immediately with the plan document provider and/or your retirement plan consultant.

Get Ahead of Compliance Concerns

Plan sponsors should consider reviewing and testing their plan compliance during the restatement period as this is a great time to help ensure your program is in good standing. Are the correct compliance tests being performed? Is the plan having trouble passing any tests? Enlisting the help of a third-party administrator may be advisable if there is a concern. An independent review of plan documents and procedures could help pinpoint potential issues in the plan. Both the Internal Revenue Service (IRS) and the Department of Labor (DOL) have shown increasing interest in plan compliance enforcement for 403(b) plans. Plan sponsors who are proactively addressing current issues may help lower the future risk of deficiencies showing up in an IRS or DOL audit. 

When in Doubt, Ask for Help

Working with a qualified retirement plan consultant can help you navigate the restatement process and help ensure that your plan documents are in good standing with the various 403(b) plan requirements.

If you have any questions on the restatement process, please contact us here.

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Diane Caron

Diane Caron, QPA, QKA is a Director in the Retirement and Benefit Plan Services group. She can be reached at 617.761.0539 or



Copyright © 2020 CBIZ  & MHM (Mayer Hoffman McCann P.C.). All rights reserved. CBIZ and MHM are separate and independent legal entities that work together to serve clients. CBIZ is a leading provider of tax and consulting services. MHM is an independent CPA firm providing audit and other attest services. This article is protected by U.S. and international copyright laws and treaties. Use of the material contained herein without the express written consent of the firms is prohibited by law. Material contained in this alert is informational and promotional in nature and not intended to be specific financial, tax or consulting advice. Readers are advised to seek professional consultation regarding circumstances affecting their business.

Tags: not-for-profit, IRS, 403(b), NFP, 403(b) Plan Document Restatement

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