Are you ready for the required changes to 403(b) plans in 2009?

Non-profit senior care providers, who have fiduciary responsibilities for their 403(b) tax-deferred retirement plans, including reporting and disclosure responsibilities, need to be gathering information to properly document these plans and prepare for financial statement audits. These two new compliance requirements will require substantial changes on the part of plan sponsors. For many plan sponsors, fulfilling these compliance requirements will likely require administrative practices that were never previously considered.

A few questions can help 403(b) plan sponsors determine whether their plans may be subject to audits. Also included are some helpful hints on gathering the necessary information.

You can depend on Plante & Moran employee benefit consultants and benefit plan audit specialists to help you work through both requirements. Our employee benefit plan consultants can design a plan to meet your needs. They have the right mix of skills and years of experience working with tax-deferred 403(b) retirement plans. You can also count on the experience of our benefit plan audit team. The specialized audit team performed more than 950 audits last year. 

Documenting your 403(b) plan

For 403(b) plans not subject to the requirements of the Employee Retirement Income Security Act (ERISA), the documentation initially had to be completed by January 1, 2009, but the Internal Revenue Service delayed its requirement for a written plan to December 31, 2009, because plan sponsors and practitioners called for relief.

Plans subject to ERISA have always been required to have a plan document in place. It is important to note, however, that all 403(b) plan sponsors must currently operate their plan in accordance with final IRS regulations, even those not subject to ERISA and those not required to have a written plan in place until December 31, 2009.

Understanding how participants are currently using your 403(b) plan and obtaining the necessary participant records can be very time consuming and complicated for the plan sponsor because participants are accustomed to individualizing their retirement accounts within the plan and gaining access to the funds in a myriad of ways.
Senior care providers should build their written plans on the gathered information so that they honor the past and set expectations for the future. The written plan should align the goals of the plan sponsor with the new 403(b) plan requirements. A successful benefit plan audit will rely on having access to appropriate plan documentation, along with participant and financial information. 

More employer responsibility

Sponsors of many 403(b) plans must transition from their role as a simple pass through for retirement savings and take on more responsibility. Because of the complexity of many 403(b) plans there may be a tendency to break up the current plan into several plans to cover different categories of participants.

It is important to remember, however, that each of these 403(b) plans could require an annual financial statement audit, so you can save money by taking the time now to develop a comprehensive plan which includes written administrative policies and procedures and in many cases selecting a third-party administrator and investment advisors.

One of the administrative issues could be who will pay for the audits and other administrative tasks -- the plan sponsor or the plan participants. 

Compliance demands accurate financial information

Because of our experience working with 403(b) plan sponsors, you will appreciate our help gathering the information you need to develop the financial statements for your plan. And you can depend on our benefit plan audit specialists to organize the material so that the process will be more streamlined moving forward.

As the plan sponsor, you can be assured that our employee benefit plan audit specialists will cover issues emphasized by the Department of Labor (DOL). We audited more than 950 plans last year and we understand the importance of having expertise in this highly regulated area.

For timely resolutions to issues, we can draw on long-term, professional relationships with the DOL, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC).

Because we’re one of the nation’s largest accounting, tax, and management consulting firms, we also have relationships with most of the large investment, insurance, and record-keeping companies, banks, and actuarial firms. This allows us to efficiently secure necessary audit information.

Employee benefit plans are a focus area for our firm - You will notice the difference when we put our experience to work for you!