Posted: 4/25/2008

The §403(b) plan landscape has long been an assortment of regulations and other IRS guidance dating back to the 1960s. In 2004, the IRS proposed a comprehensive set of regulations intended to consolidate the IRS’s various §403(b) plan guidance. In 2007, these proposed regulations were modified and finalized with a general effective date of January 1, 2009, although there are certain provisions that impact §403(b) plan operation prior to the general effective date.  Concurrent with these final regulations, the Department of Labor issued a Field Assistance Bulletin supplementing the ERISA regulation allowing certain nongovernmental §403(b) plans to be exempt from ERISA if the specified safe harbor requirements are satisfied. Subsequent IRS guidance provided further guidance on what plan ‘‘terms’’ must be included in a §403(b) plan to comply with the final regulations.

This article focuses on a number of significant changes and trends reflected in the final §403(b) regulations and related guidance that impact plan design and implementation decisions that should be made in 2008.

If you have any questions, please contact Lou Mazawey, David Powell or David Levine.