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403(b) Program Riding Out the Storm- 403(b) & 457(b) Retirement Plan Issue.

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Presentation on theme: "403(b) Program Riding Out the Storm- 403(b) & 457(b) Retirement Plan Issue."— Presentation transcript:

1 403(b) Program Riding Out the Storm- 403(b) & 457(b) Retirement Plan Issue

2 403(b) Program Presentation Overview Public School 403(b) Plan Document Requirements Common 403(b) & 457(b) Errors New Retirement & Savings Initiatives How to Get More Information

3 403(b) Program GFOASC- 25 Years and Counting Apple Computer Releases the Mac Michael Jackson’s Hair Caught Fire First Infomercials Appear Cosby Show Premiers Term Cyberspace Coined First Woman Vice Presidential Candidate

4 403(b) Program Daniel S. Gardner 216-328-2887 Contact Information

5 403(b) Program The Written 403(b) Plan Req. Originally Required 1/1/09 Revenue Procedure 2007-71- Model Plan For Public Schools As of 1/1/09, No IRS Pre-Approved or Determination Letter Program Not Everyone Was Ready, So………

6 403(b) Program Notice 2009-3 Issued 12/11/08 Transition Relief- Written Plan Requirement- 2009 Calendar Year Not a Free “Push Back” of Date Written Plan is Required By, Since………..

7 403(b) Program Relief is Based on Plan Sponsor’s Actions! Written Plan- Adopted On or Before 12/31/09 –Intend to Satisfy 403(b), Including Regulations During 2009-Operate In Accordance With a Reasonable Interpretation of 403(b) & New Regulations On or Before 12/31/09, Best Efforts Made to Retroactively Correct 2009 Operation To Conform With The Written Plan

8 403(b) Program What are “Best Efforts” for 2009 Corrections? Employee Plans Compliance Resolution System (EPCRS) – Rev. Proc. 2008-50 - Section 6 –General Correction Principals –Main Theme = Restoration of Benefits

9 403(b) Program The Written Plan – Essential Elements Eligibility (Non-Discrimination Rules) Benefits Dollar Limitations Available Investments Time & Form of Distributions

10 403(b) Program Loans Hardship Distributions Automatic Enrollment After Tax Roth Accounts The Written Plan – Optional Elements

11 403(b) Program Elective Deferral Catch-Ups –15 Year Plus Service –Age 50 or Older In-Service Contract Exchanges Transfers Termination 5-Year Post Severance Contribution The Written Plan – Optional Elements- continued

12 403(b) Program 2009 403(b) Compliance No Written Plan Form Failures in 2009 – Includes: –Absence of Written Plan or –Amendment of Existing Plan to Comply With Final 403(b) Regulations 2009 IRS Focus – Operational Failures Notice’s Transition Relief - 2009 Calendar Year Only

13 403(b) Program Announcement 2009-34 Opinion Letter & Prototype Programs –Draft Revenue Procedure –Draft Sample Plan Language –Request for Comments- June 2009 Next – Determination Letter Program, and…………. 2009-34

14 403(b) Program Retroactive Remedial Amendments For Years After 2009 403(b) EPCRS Modifications 2009-34 Announcement 2009-34

15 403(b) Program Most Common 403(b) Errors Universal Availability Excess Deferrals- Ordering Rules, Post Severance Sick & Vacation Hardship Distributions- Self Certify Loan Limits- Multiple Vendors

16 403(b) Program 403(b) Hardship Distb. Safe Harbor Medical Expense Purchase Principle Residence Post Secondary Education Prevent Eviction Funeral Expenses Repair of Principle Residence

17 403(b) Program Most Common 457(b) Errors Excess Deferrals- Last 3 Years Catch Up, Post Severance Sick & Vacation Unforeseeable Emergency Distb- Self Certify Loan Limits- Multiple Vendors

18 403(b) Program Unforeseeable Emergency Sudden or Unexpected Illness or Accident Loss of Property Due to Casualty Extraordinary & Unforeseeable Circumstance Beyond Participant’s Control

19 403(b) Program Unforeseeable Emergency cont. Severe Financial Hardship-Illness or Accident –Spouse –Beneficiary –Dependent

20 403(b) Program Unforeseeable Emergency cont. Prevent Imminent Foreclosure or Eviction Medical Expense to Include Non- Refundable Deductible Funeral Expenses

21 403(b) Program Retirement & Savings Initiatives Automatic Enrollment –Rev. Rul. 2009-30- Demonstration of Automatic Contribution Increases –Notice 2009-65- Sample language Sponsors Can Adopt

22 403(b) Program Retirement & Savings Initiatives continued Tax Refund as Savings Bond –2010 Simple Check of a Box –Convert Tax Refund to I Savings Bond –Future Years Purchase for Children or Grandchildren

23 403(b) Program Retirement & Savings Initiatives continued Save Unused Vacation or Similar Leave –Rev. Rul. 2009-31- Annual Contributions As Employer Contribution As Elective Deferral –Rev. Rul. 2009-32- Similar Contributions At Termination

24 403(b) Program What’s New Resources Ask Bob Architect!

25 403(b) Program How Can I Find Out More?

26 403(b) Program Ya’ll Come Back Now

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