The New England Not-For-Profit Accounting Advisor

On March 27, 2020 the Internal Revenue Service (IRS) extended the mandatory 403(b) plan document restatement deadline from March 31, 2020 to June 30, 2020 due to the current COVID-19 pandemic. All organizations that sponsor 403(b) retirement plans must restate their plan documents by this new date 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.

Topics: not-for-profit, IRS, 403(b), NFP, nonprofit, 403(b) Plan Document Restatement, Department of Labor, DOL, Internal Revenue Service, COVID-19, extension, deadline

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law on Dec. 20, 2019 by President Trump, is the most expansive piece of retirement legislation since the Pension Protection Act of 2006. Effective Jan. 1, 2020, the law will have some impact on nearly every retirement plan and participants with numerous provisions intended to increase retirement security, expand plan coverage, encourage retirement savings and decrease plan costs. It offers small businesses tax incentives to set up automatic enrollment in retirement plans for its workers, or allows them to join multiple employer plans, where they can band together with other companies to offer retirement accounts to their employees in the first place.

Topics: not-for-profit, 403(b), NFP, the SECURE Act, retirement planning

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.

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

Recently, the IRS made several changes to the rules related to hardship withdrawals for not-for-profit organizations. The changes may be adopted by plan sponsors as early as Jan. 1, 2019 or, if later, the first day of the plan year beginning after Dec. 31, 2018.

Topics: not-for-profit, IRS, 403(b), NFP, nonprofit, hardship withdrawals

It seems like yesterday that employers sponsoring 403(b) plans went through the process of obtaining written plan documents.  Employers must now again face the process of rewriting their 403(b) documents.  The IRS recently announced that employers have until March 31, 2020 to restate their 403(b) plans into IRS pre-approved documents in order to have reasonable assurance that the plan document as written is in compliance with current law.

Topics: Bernard Kaplan, 403(b), Diane Caron, 403(b) Plan Document Restatement

The IRS recently provided guidance related to the restatement of 403(b) plans. It is anticipated that the IRS will be issuing approval letters to document providers for all 403(b) plans in early spring 2017. Once issued, all employers will be required to restate their 403(b) plans using pre-approved language.

In Rev. Proc. 2017-18, the IRS set Mar. 31, 2020, as the deadline for restating all 403(b) plans. The end of the restatement period (referred to as the remedial amendment period) is the date by which all 403(b) plans must be restated to remain in compliance with the 403(b) regulations. The restatement is retroactive to Jan. 1, 2010.

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

Compliance with retirement plan requirements is a moving target. As changes in the law occur, retirement plans are required to comply in operation with the new provisions as of the effective date of the law. Along with these changes, the IRS announces periods during which the plan must adopt interim amendments so that the plan’s language conforms to the plan operation. Retirement plan documents must then be restated in their entirety at set intervals (every five to six years), incorporating the required interim amendments.

Topics: 403(b), Diane Caron, 403(b) Plan Document Restatement

In an effort to make 403(b) plan sponsors aware of common mistakes made by not-for-profit entities and educational institutions administering such plans, in December 2013 the IRS updated two publications that relate to such plans. According to the IRS, “It is important to know the tax rules that apply to your 403(b) plan and to pay attention to the operation of your plan so you can maximize your employees’ retirement benefits, comply with the law, and avoid additional taxes and penalties.”

The publications – Publication 4482, 403(b) Tax-Sheltered Annuities for Participants and Publication 4483, 403(b) Tax-Sheltered Annuity Plans for Sponsors – list mistakes the agency commonly finds in these plans. In addition, 4482 also provides an overview of 403(b) plan features. The other publication offers information on several IRS products and services available to assist plan sponsors in keeping things running smoothly.

Topics: non-for-profit, IRS, IRS Updates, Bernard Kaplan, 403(b)