IRS Delays 403(b) Plan Document Requirement

The Internal Revenue Service recently announced relief for 403(b) plan sponsors by delaying the requirement to have a written plan document in place until December 31, 2009. The extension was granted by the IRS in an effort to better prepare plan sponsors in satisfying the final 403(b) regulations that become effective on January 1, 2009.

According to IRS Notice 2009-3, relief will be provided as long as the plan sponsor adopts a written plan document by December 31, 2009, and operates the plan throughout the 2009 calendar year in accordance with a reasonable interpretation of the final 403(b) regulations. Additionally, the plan sponsor must make its best efforts to retroactively correct any plan failures prior to the end of 2009, in accordance with the principals of correction outlined in the IRS’ Employee Plans Compliance Resolution System program.

To further assist plan sponsors in this process, the IRS intends to establish a prototype document program for 403 (b) plans in 2009 that would provide additional guidance in proper plan documentation.

For more information, please contact Wil Drake in our Retirement & Financial Services Division at 919-913-0235 or by email at wdrake@hcwbenefits.com.

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December 18, 2008

Hill, Chesson & Woody Employee Benefit Services

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