IRS Gives Welcome Relief to 403(b) Plan Sponsors!
By Mary Ellen Schill
December 11, 2008
Yesterday afternoon the IRS issued a notice delaying the date Code Section 403(b) plans must have a written plan document. Prior to this notice, Code Section 403(b) plan sponsors had to have a written plan document in place by January 1, 2009, fully compliant with the final Code Section 403(b) regulations issued in July 2007.
Under this new IRS notice, Code Section 403(b) plan sponsors will not be treated as failing to comply with the written plan document requirement of the final Code Section 403(b) regulations so long as:
the written plan document is adopted on or before December 31, 2009;
during 2009, the plan sponsor operates the Code Section 403(b) plan in accordance with a reasonable interpretation of Code Section 403(b), taking into account the final regulations; and
before the end of 2009, the plan sponsor takes steps to retroactively correct any failure in operation to conform to the terms of the written plan document, using correction principals similar to those found in the IRS plan defect correction program found in Revenue Procedure 2008-50.
If you have questions regarding the above, please contact Mary Ellen Schill, the author of this article, or any of the attorneys in the Employment, Benefits & Labor Relations Practice Group of Ruder Ware.
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