403(b) Plans
Five Major Trends for 403(b) Plans
The last decade has seen a major shift in the treatment of 403(b) retirement plans, and many 403(b) plans now look and feel closer to 401(k) plans. Most of these changes are positive, especially from the viewpoint of the employee/investor.  But while the Department of Labor’s (DOL’s) introduction of  Employee Retirement Income Security Act (ERISA) to 403(b) opened plans to a variety of investment vehicles, it also created additional disclosure requirements and responsibilities for plan fiduciaries. A recent article in NACUBO’s Business Officer magazine closely examines the undercurrents of these changes, summarizing five major trends to look for in future changes: Increased recognition of the. Read More.
If Young Higher-Education Employees Have Retirement Plans, They’re as Conservative as Those of Baby Boomers
A recent study by Fidelity Investments found younger higher-education employees investment strategies, where they exist, don’t necessarily align with their needs. As Market Watch reports, fewer than 25% of respondents ages 21-32 have a formal investment plan, and those that do are very conservative in their choices. Nearly half (49%) of the higher education workers surveyed described themselves as “conservative” investors when it comes to retirement, regardless of age. In fact, younger employees were found to be using the same asset allocation strategies as their older counterparts, with Gen Y using a similar asset mix (50% stock, 35% bond/annuity and 15% cash). Read More.
IRS Targets College Retirement Plans in New Survey
The IRS looks to be increasing its already heightened attention on colleges and universities . As Inside Higher Ed reports, IRS officials recently announced a new survey of a sample of 300 colleges about their retirement plans. 403(b) accounts are tax-sheltered retirement plans that allow employees (and their nonprofit employers, in lieu of salary) to make pre-tax contributions to accounts and not pay taxes on them (or on the earnings) until the funds are withdrawn. The IRS changed the rules governing the plans, which are widely employed in higher education, beginning in 2009.
Inflation-Adjusted Retirement Plan Contribution Limits for 2011
Every year, the IRS issues new limits that will apply to retirement plan contributions for the following year. On October 28th, the IRS announced the cost of living adjustments for 2011. Continuing a trend from 2009, there are virtually no changes. Below is a brief list of the 2011 limits, noting whether or not there will be an increase applied:
IRS Hosts Free 403(b) Plan Update Phone Forum on April 30th
The IRS will be hosting a 403(b) Plan Update Phone Forum on Friday, April 30, 2010. There is no cost for attending this presentation, which will feature: Cheryl Press, Senior Counsel, Office of Chief Counsel (TEGE), who will provide a brief history of 403(b) plans , the basics of how they have operated in the past, and how developments over the past 40 years led to the issuance of the recent final regulations for 403(b) plans Jason Levine, Tax Law Specialist, who will briefly recap the more significant changes brought about by the final regulations including a discussion of the written plan document requirement for 403(b) plans.
Is Your 403(b) Plan in Compliance?
Changes implemented by the Department of Labor to 403(b) Plan Legislation require nonprofit organizations to pay particular attention to reporting requirements. For plan years beginning on or after January 1, 2009, 403(b) plans that are subject to ERISA will need to comply with the same annual reporting requirements as other tax advantaged (qualified) plans. To help you determine if you are subject to these new requirements, here are two useful documents published by the AICPA Employee Benefit Plan Audit Quality Center: Form 5500 Reporting and Independent Audit Requirements – This document is designed to help you identify if these changes apply to your benefit plan Getting Started: Meeting the New Form 5500 Reporting and Auditing Requirements – This document provides steps that you, as a plan sponsor. Read More.