403(b) News!
On July 20, 2009 the Department of Labor (“DOL”) Employee Benefits Security
Administration (“EBSA”) issued Field Assistance Bulletin (“FAB”) 2009-02
Annual Reporting Requirements for 403(b) Plans which provides some relief
with regard to the reporting requirements for 403(b) plans beginning with
the 2009 plan year.
See
http://www.dol.gov/ebsa/regs/fab2009-2.html.
In November 2007, the DOL issued regulations that changed the reporting requirements for 403(b) – Tax-Sheltered Annuity Plans – that are subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) Title I, from a simplified registration statement to full completion of the Form 5500 Annual Return/Report of Employee Benefit Plan. See http://www.dol.gov/ebsa/regs/fedreg/notices/20071116.pdf.
For large plans, (those with more than 100 participants at the beginning of the plan year), full completion will generally also require the plan administrator to engage an independent public accountant to audit the accompanying financial statements.
A major challenge for most plans is the collection of data relating to
former participants and information regarding their
accrued benefits under the plan. This could significantly impact not only
the determination of the number of participants in the plan at the beginning
of the plan year, but also whether any financial information being reported
is materially correct.
FAB 2009-02, recognizing these challenges, may allow plan sponsors to disregard certain pre-2009 contracts and accounts, provided the contracts or accounts meet certain criteria including: the contract or account was issued before January 1, 2009; the employee is 100% vested in and can enforce the contract or account, and no contributions were made to the contract or account after December 31, 2008.
Somerset's EBP specialists are available to assist plan sponsors in understanding and implementing these new rules. Please contact us.
Employee Benefit Plan Commentator is provided by Somerset’s Employee Benefits Team for our clients and other interested persons upon request. For additional information on the issues discussed, please contact Yvette C. Ward, CPA. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review.
These articles were written by and published herein
with the permission from professionals of BDO Seidman, LLP. Somerset is a
member of the BDO Seidman Alliance, a nationwide association of
independently owned accounting and consulting firms.
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