Findings on Reviews of Restated 403(b) Plans
Our Employee Benefits Services Group (EBSG) has expended a lot of time reviewing restated 403(b) plan documents that record keepers, third party administrators, or other plan document preparers have provided to plan sponsors to review.
Typically, the plan document consists of an Adoption Agreement (AA), a Basic Plan Document (BPD), and other supporting documents such as Appendices, Checklists, other forms that are used to identify “grandfathered” provisions, amendments made to the plan, administrative matters/processing, etc.
Eventually, when the plan document process is completed and the plan is finalized, a Summary Plan Description (SPD) will be created by the plan document preparer to be provided to the plan administrator who will disseminate it to the plan participants.
Findings
Our plan document reviews of 403(b) changes have determined errors in several and varying circumstances, including:
Change(s) to Retirement Plans
Some employers periodically review their retirement program and make changes for several reasons. Changes that we are aware of include: the merger of plans (e.g., the employer maintained an employee contribution only plan and an employer contribution only plan); evaluation of adding auto-enrollment and escalation clauses; reducing the number of loans and hardship distributions available from the plan, evaluating the costs, fees and services being provided by the current record keeper and other service providers to the plan.
IRS Revenue Procedures 2013-22 and 2016-37 discuss the procedures used by the IRS to issue opinion and advisory letters for 403(b) pre-approved plans, and the applicable six-year remedial amendment cycle.
Contact Us
The Employee Benefit Services Group (EBSG) at PKF O’Connor Davies is available to assist employers with the review of plan documents and can also assist with the various compliance reporting and other requirements imposed by federal agencies. We also provide a full spectrum of compliance services for qualified retirement plans, 403(b) plans, non-qualified deferred compensation plans, and welfare plans.
For more information, please contact your client services partner or either of the following:
Timothy J. Desmond, CPA
Partner
Director of the Employee Benefit Services Practice
tdesmond@pkfod.com | 551.249.1728
Louis F. LiBrandi, EA, CEBS, ChFC, TGPC
Principal
Employee Benefit Services Group
llibrandi@pkfod.com | 646.449.6327