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Pension and Employee Benefits: Code, ERISA, & Regulations
This series provides an authoritative and comprehensive reference to the full text of benefits-related provisions of the Internal Revenue Code, the full text of ERISA, and related proposed and final regulations, as well as the official IRS and DOL preambles, and Committee Reports.
The IRS is preparing guidance on termination of 403(b) plans and prototype 403(b) plans, Service officials said during an April 30, 2010 teleconference. The additional guidance reflects questions from plan sponsors and employers after issuance of final regulations.
Plan termination guidance
The final regulations require that 403(b) plans be maintained under a written plan, Cheryl Press, senior counsel, IRS Office of Chief Counsel, reminded listeners. A written plan requires several essential elements, such as meeting nondiscrimination rules, dollar limitations, listing available investments and the time and form of distribution, Press explained.
"If a plan sponsor wants to have the option to terminate the plan, the option must be in the written plan," Press said, adding that the IRS is developing additional guidance on terminations of 403(b) plans.
Prototype plans
The IRS continues to refine its guidance on prototype plans, Jason Levine, tax law specialist, IRS Employee Plans, said. Upcoming guidance is expected to answer questions from plans about vesting schedules for nonelective employee contributions and allowing prototypes for church plans, Levine predicted.
Plan loans
Since issuance of the final regulations, questions have arisen about plan loans. "A 403(b) plan may have three different vendors; two of which offer loans and one that does not," Press noted. "The plan document must state loans are allowed," she added.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
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