NEW IRS Regulations

The IRS is very active in pursuing compliance of regulations for 403(b) and other retirement plans in schools and non-profit organizations.  The compliance activities are the most intense that we have seen in our nearly 40 years of specializing in such plans.  403(b) plans, in particular, have received much attention from the IRS in the past two years, culminating in new regulations that went into effect as of January 2009.  These new regulations require employer-sponsored plans to satisfy certain form and operation requirements through a written document.  Administration of these plans is no longer possible without the services of a third-party retirement plan administrator.

We offer 403(b) plan administration services through Midwest Group Benefits, Inc. and Great American Plan Administrators, Inc.  Depending on your type of organization, we may be able to offer you an employee retirement plan with no administrative fees or expenses.  If you have a current plan, we can provide a cost and service comparison so that you are receiving maximum benefit for your retirement plan dollars.  If you do not have a current plan, we can work with you to design a plan that fits the needs of your organization and stays within your budget.

If you have any questions about your plan being compliant with the new IRS regulations, call us today!   CLICK HERE to contact us through this website.  We will visit with you about how we can simplify the administration of your plan

How we got here.

The IRS has issued new regulations regarding 403(b) plans. These 403(b) plans (commonly called TSA plans) are very popular with school employees and provide a significant portion of the retirement income for many retirees. In the past, school districts have been viewed primarily as a conduit for TSA dollars being withheld from employee paychecks. Individuals were allowed to choose their investments from a wide range of products available through their own financial advisors.

What has changed?

The IRS now views the employer (school district) as responsible for the administration of the 403(b) plans. There are requirements for the employer regarding Information Sharing Agreements with investment providers to allow transfers and other transactions to meet the regulations. Also, employers must adopt a 403(b) Plan Document if they have ever allowed or will continue to allow employees to contribute to 403(b) contracts. Most employers will use the services of a third-party administrator (TPA) to meet the requirements of the new regulations. Employees may find that they are not able to
continue to make contributions to their existing TSA investment provider.

The State of Iowa Plan.

The State of Iowa is providing an option for school districts that is designed to meet the requirements of the new IRS regulations. This plan offers 6 investment providers for TSA contributions. As of January 1, 2009, employees of school districts that have elected the State of Iowa plan will not be able to make new 403(b) contributions through payroll deduction to any other investment provider other than the 6 chosen by the state. Existing TSA dollars – dollars you have already saved – may be eligible for transfer to these 6 providers after 1/1/2009 or to other providers prior to 1/1/2009.

Schools not adopting the State of Iowa Plan.

A number of schools in Iowa have elected to use a third-party administrator and offer their own approved investment providers. These schools may limit the number of investment providers and employees will need to consult with their employer to determine if they can continue contributions to their current TSA investment.

What if your employer is a non-profit organization?

The new IRS regulations apply to any employer that has ever made a 403(b) plan available or is currently making one available to their employees. These organizations may want to contact us for information.

We have the resources . . .

We have worked with 403(b) plans since 1975 and have stayed current with the many regulation changes over the years. We have delivered on our promises while providing outstanding support. We understand the 403(b) business and we have outstanding resources that provide current information and support to us and our employers and clients. We will continue to provide accurate, timely and easy-to-follow information.

Click here for complete information regarding the new IRS 403(b) regulations. You will be directed to the website of an experienced provider of 403(b) administrative services.

Click here for information regarding the State of Iowa plan and the plans being used by schools that did not adopt the state plan. We will put you in touch with an experienced provider of 403(b) administrative services.