Transcript The 403(b) Landscape Post December 31, 2008

403(b) Program
Riding Out the Storm- 403(b) & 457(b)
Retirement Plan Issue
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403(b) Program
Presentation Overview
• Public School 403(b) Plan Document
Requirements
• Common 403(b) & 457(b) Errors
• New Retirement & Savings Initiatives
• How to Get More Information
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403(b) Program
GFOASC- 25 Years and Counting
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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
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403(b) Program
Contact Information
Daniel S. Gardner
216-328-2887
[email protected]
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403(b) Program
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………
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403(b) Program
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………..
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403(b) Program
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
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403(b) Program
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
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403(b) Program
The Written Plan –
Essential Elements
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Eligibility (Non-Discrimination Rules)
Benefits
Dollar Limitations
Available Investments
Time & Form of Distributions
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403(b) Program
The Written Plan –
Optional Elements
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Loans
Hardship Distributions
Automatic Enrollment
After Tax Roth Accounts
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403(b) Program
The Written Plan –
Optional Elements- continued
• Elective Deferral Catch-Ups
– 15 Year Plus Service
– Age 50 or Older
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In-Service Contract Exchanges
Transfers
Termination
5-Year Post Severance Contribution
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403(b) Program
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
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403(b) Program
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
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403(b) Program
Announcement 2009-34
• Retroactive Remedial Amendments
For Years After 2009
• 403(b) EPCRS Modifications
2009-34
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403(b) Program
Most Common 403(b) Errors
• Universal Availability
• Excess Deferrals- Ordering Rules,
Post Severance Sick & Vacation
• Hardship Distributions- Self Certify
• Loan Limits- Multiple Vendors
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403(b) Program
403(b) Hardship Distb. Safe Harbor
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Medical Expense
Purchase Principle Residence
Post Secondary Education
Prevent Eviction
Funeral Expenses
Repair of Principle Residence
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403(b) Program
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
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403(b) Program
Unforeseeable Emergency
• Sudden or Unexpected Illness or
Accident
• Loss of Property Due to Casualty
• Extraordinary & Unforeseeable
Circumstance Beyond Participant’s
Control
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403(b) Program
Unforeseeable Emergency cont.
• Severe Financial Hardship-Illness or
Accident
– Spouse
– Beneficiary
– Dependent
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403(b) Program
Unforeseeable Emergency cont.
• Prevent Imminent Foreclosure or
Eviction
• Medical Expense to Include NonRefundable Deductible
• Funeral Expenses
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403(b) Program
Retirement & Savings Initiatives
• Automatic Enrollment
– Rev. Rul. 2009-30- Demonstration of
Automatic Contribution Increases
– Notice 2009-65- Sample language
Sponsors Can Adopt
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403(b) Program
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
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403(b) Program
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
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403(b) Program
• What’s New
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• Resources
• Ask Bob
Architect!
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403(b) Program
How Can I Find Out More?
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403(b) Program
Ya’ll Come Back Now
Ya’ll Come Back Now
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