IRS regulations applicable to 403(b) plans became effective in January 2009. As a result, most 403(b) plans must now comply with the regulations' requirement for a written plan document, changes to coverage and nondiscrimination testing rules, and limitations on plan transfers and exchanges. In addition, new Form 5500 (or Form 5500-SF for small 403(b) plans) requirements apply to 403(b) plans beginning with forms filed in 2010 for the 2009 plan year.
In an effort to ease the burden of Form 5500 compliance, the DOL is mailing a letter to the administrators of 403(b) plans subject to ERISA reminding them of the new Form 5500 annual reporting requirements and directing them to various DOL resources for help in understanding and complying with the new requirements.
The DOL also released Field Assistance Bulletin 2010-01 (the "FAB"), which provides additional guidance on Form 5500 annual reporting requirements as well as information on which arrangements are covered by these requirements. The FAB provides guidance on when an annuity contract or custodial account issued before 2009 needs to be included in the Form 5500, what constitutes a "good faith" effort to comply with the reporting requirements and what role a third party administrator ("TPA") may play in regards to administering a 403(b) plan. The FAB may be found at http://www.dol.gov/ebsa/regs/fab2010-1.html.
Additionally, the DOL set up a Webpage to provide plan administrators and officials with comprehensive guidance on 403(b) plan issues in one place. The Webpage contains field assistance bulletins, recent DOL publications, information on voluntary correction programs and several IRS resources. The Webpage may be found at http://www.dol.gov/ebsa/403b.html.
The DOL also set up a hotline to assist 403(b) plan administrators and officials who are completing Form 5500 (or Form 5500-SF). Plan administrators and officials may call to ask questions about filling out the forms and their plan's reporting requirements. The toll-free Form 5500 help desk is available from 8:00 a.m. to 8:00 p.m. (EST) and may be reached at (866) 463-3278.
In addition to the latest DOL guidance, the IRS recently stated that it will begin a determination letter application program for prototype, or preapproved, 403(b) plans this spring. The IRS will release a revenue procedure describing the program and listing the procedures that TPAs may use to submit an application to the IRS. In about a year, the IRS expects to release a revenue procedure for the individually designed 403(b) plan determination letter process.
Plan administrators and officials should take advantage of the newly-released IRS and DOL guidance and use it to assist them in complying with the additional documentation and reporting requirements recently imposed on 403(b) plans.