November 18, 2004
In this issue:
- 403(b) Regulations Proposed, New Summary Available
403(b) Regulations Proposed, New Summary Available
On November 15, for the first time in 40 years, the Internal Revenue Service (IRS) and the U.S. Treasury Department (Treasury) issued proposed and temporary regulations updating the guidance governing tax-deferred retirement savings for employees of public schools, tax-exempt organizations and churches. The new guidance, first reported by the Council in our November 16 Benefits Byte, will make obsolete many revenue rulings, notices and other guidance under Internal Revenue Code Section 403(b), according to Treasury and the IRS.
The proposed regulations make a number of significant changes to the current rules, including a written plan document requirement that may have adverse consequences for employers trying to avoid the application of the Employee Retirement Income Security Act of 1974 (ERISA) to their Section 403(b) retirement savings programs. For a more detailed description of some of the provisions of the proposed regulations, including the ERISA ramifications of the new document requirement, the Council has prepared a brief summary.
The proposed regulation is expected to be effective for plan years beginning after December 31, 2005 and may not be relied upon prior to issuance of the final regulations. For more information, contact Jan Jacobson, Council director, retirement policy, at (202) 289-6700.
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.