IRS Offers Relief on 403(b) Written Plan Requirement

By Stephen Miller Dec 19, 2008

New regulations for section 403(b) defined contribution retirement plans, used by public school systems and section 501(c)(3) not-for-profit organizations, take effect on Jan. 1, 2009. However, the IRS issued a notice on Dec. 11, 2008, announcing relief for 403(b) plans that do not have a written plan in place by Jan. 1, 2009.

Notice 2009-3 says the IRS will treat plans as meeting the requirements of section 403(b) and the new regulations during the 2009 calendar year if:

During 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations.

By Dec. 31, 2009, the plan sponsor has adopted a written 403(b) plan that is intended to satisfy the requirements of 403(b) and the new regulations.

By Dec. 31, 2009, the plan sponsor makes its best effort to retroactively correct any operational failure during the 2009 calendar year to conform to the written plan.

The IRS said it was extending the deadline for plan sponsors to adopt new written plans or amend existing plans to satisfy the requirement of the final 403(b) regulations "because of difficulties expressed by numerous plan administrators" in meeting the current deadline.

Related Article: SHRM Online

403(b) Retirement Plan Final Regs: An Overview, SHRM Online Benefits Focus Area, August 2007

403(b) Plans: New Regulations--Making 403(b)s More Like 401(k)s, SHRM Online Benefits Discipline, October 2006

Related Articles: External

IRS Provides 403(b) Relief, Ford & Harrison LLP, December 2008

Stop the Presses: Written Plan Document Requirement for Section 403(b) Plans Extended to December 31, 2009, McGuireWoods LLP, December 2008.

IRS Extends 403(b) Deadline, Blake Rome LLP, December 2008


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