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IRS Publishes Further 403(b) Plan Doc Steerage

The IRS has revealed a “Itemizing of Required Modifications and Info Package deal” for 403(b) pre-approved plans. The data bundle…

By Staff , in Investments , at April 25, 2022


The IRS has revealed a “Itemizing of Required Modifications and Info Package deal” for 403(b) pre-approved plans.

The data bundle comprises samples of plan provisions which were discovered to fulfill sure necessities of Inside Income Code Part 403(b) and associated rules. The IRS says it has ready the bundle to help suppliers which can be drafting 403(b) pre-approved plans, and to speed up the company’s overview of them.

The data bundle has been up to date to replicate the 2022 Cumulative Record of Adjustments issued by the IRS in January.

Though the bundle is meant to help 403(b) pre-approved plan suppliers in drafting plan paperwork, the IRS says insurance coverage corporations and custodians can also look to the language of the pattern provisions in drafting phrases of annuity contracts and custodial accounts which can be required by IRC Part 403(b). The company additionally notes {that a} 403(b) pre-approved plan might use both a single plan doc format or a fundamental plan doc with an adoption settlement, and the pattern provisions included within the bundle might usually be used with both format. Nevertheless, it says, a plan design utilizing a single doc format might want to make acceptable changes.

The great bundle comprises basic pattern plan provisions relevant to:

  • plans that don’t settle for contributions apart from elective deferrals;
  • plans that settle for contributions apart from elective deferrals;
  • standardized and non-standardized 403(b) pre-approved plans; and
  • a retirement earnings account.

Noting that sure 403(b) pre-approved plans could be lined by Title I of the Worker Retirement Earnings Security Act, the IRS says it doesn’t have jurisdiction over Title I, so the bundle doesn’t include pattern Title I plan provisions. Nevertheless, the company has developed pattern plan provisions to allow Part 401(a) pre-approved plans to adjust to IRC qualification necessities which have parallel Title I necessities, and the knowledge bundle comprises hyperlinks to assist drafters of ERISA 403(b) pre-approved plans adjust to Title I.

In Income Process 2019-39, the IRS established a recurring remedial modification interval for 403(b) plans, and the submission interval for Cycle 2 functions will start on Might 2, 2022, and finish on Might 1, 2023.

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