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Through Tech Talk, you can obtain answers from the industry’s experts on real-world, nuts-and-bolts issues facing those who run and serve 403(b) and 457 plans. Through Tech Talk, you can obtain ideas and information about best practices, how to comply with the laws and regulations governing such plans, and more.
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Q&As By Topic
Contributions and Deferrals
- Changing Salary Deferrals to a 457 Plan
- Hours Worked and 403(b) Plan Eligibility
- Contributions to a 457(b) plan
- Special catch-up provision for 457 plans
- Forcing a Choice Between Health and a 403(b) Match
- Timing 403(b) Remittances
- Elective deferrals to 403(b)s after leaving employment
- Special pay contributions
- Post-employment 403(b) deferrals
- Limits to pre-tax 403(b) contributions
- Handling an excess deferral
- Earliest retirement date and catch-up 457(b) contributions
- Calculating Catch-Up Contributions
- Establishing a SIMPLE IRA
- Can Employees opt out of ERISA Plans?
- Retirement Plan Limits
- Contributions to 457s
- Employer Approach to Unused Leave
- Prorating Hours Worked
- Applicability of Proposed Regs on Use of Forfeitures to Fund QNECs
- Eligibility Periods for 403(b) Plan Deferrals
- Tax Reform and Early Distributions
- Double Dipping
- Lifetime Annuities or Rider Payouts Before Age 59½?
- Beginning Automatic Withholding
- 403(b) Participation for Self-Employed Ministers
- Employer Contributions to Top Hat Group Members
- Contributions to a Minister’s Account
- Catch up Contributions and Normal Retirement Age
- Elected Officials and 457(b) Plans
- Contributions to a 403(b) Plan
- How to Figure the Maximum Amount Contributable
- Employer Contributions to a Former Employee’s 403(b)
- Deferral Elections and Nongovernmental 457(b)s
- When to Send Elective Deferrals to a Vendor
- What Contributions Can Be Made to a 403(b) Account
- How Can Contributions Be Made to a 403(b) Account?
- Excess Contributions
- What Effect Do Excess Contributions Have?
- Identifying Excess Contributions
- What Happens if One Has Excess Contributions?
- Excess Annual Additions
- Maximum Amount Contributable
- Figuring the Maximum Amount Contributable
- Benefits of Contributing to a 403(b) Plan
- How Contributions Can Be Made to a 403(b) Account
- How Much Can Be Contributed to a 403(b) Account?
- Collective Investment Funds and 403(b) Plans
- Making Contributions to a 403(b) Account
- Application of the Prohibited Transaction Exemption
- Conditions for the Prohibited Transaction Exemption
- Guiding Participants on Setting Contribution Levels
- Amounts for a Participant to Consider in Retirement Planning
- Contributions to a 403(b) Plan
- What Making a Contribution Means in Meeting a Deadline
- Employer Contributions in a 403(b) Plan on Behalf of a Deceased Employee
- What Happens When a 403(b) Doesn’t Limit Contributions to Not Exceed Section 415(c) Limits?
- Avoiding Mistakes with 403(b) Contributions
- Addressing Failure to Give all Employees the Chance to Make a Salary Deferral
Withdrawals and Distributions
- 403(b) withdrawal restrictions
- 403(b)(7) withdrawal restrictions
- Hardship withdrawals
- Hardship distributions
- Penalty taxes for withdrawals
- Penalties for early distributions from 457s
- Early withdrawals to avoid taxes?
- Hardship withdrawals from non-ERISA participants
- Hardship withdrawals from a 457 plan
- RMDs and Rehired Retirees
- Penalties for 403(b) Withdrawals
- 403(b) Withdrawals to Pay for Higher Education
- Distributions Before and After Age 59½
- IRA Conversion and RMD Penalties
- Beneficiary Options
- 403(b) Loans and Hardship Withdrawals
- 403(b) Withdrawals at Age 55
- 403(b) Distributions Before 59½
- 403(b) Interim Withdrawals
- 403(b) Beneficiary
- 403(b) Withdrawals and the Penalty Tax
- Living Trusts as Beneficiaries
- Foundation as 403(b) Beneficiary
- Withdrawals Before Returning to Work
- 457 Distributions
- When the 10% Penalty Tax Applies
- Distributions to Retired Pastors
- Treatment of Housing Allowances
- Purchase of Primary Residence
- Distributions from 403(b)s
- Penalty for Early 403(b) Distributions
- Making a Charitable Donation with a 403(b) RMD
- Distribution of Section 415 Notices
- Designating Distributions as a Housing Allowance
- Designating Distributions from a Previous Employer’s Plan
- Withdrawals from 403(b)s Before Age 59½
- Early Withdrawals from a 403(b) After IRA Rollover
- Consequences when a Retiree Comes Back Part-Time
- Election Forms for Executives
- Deferring a Distribution Election
- Acceleration of Distributions
- Interest Rate on Non-ERISA 403(b) or 457(b) Loans
- Denial of a Distribution Postponement
- Distributions at Age 59½
- Penalty for Distributions After Turning Age 59½
- Early Distributions in the Year One Turns 59½
- Severance of Employment as a Distributable Event
- Early Distributions Due to Death or Disability
- Proof of Disability and Death
- Age 55 Rule
- Best Practices Concerning Proof of Death and Disability
- Permissible Distributions
- Taxability of 403(b) Distributions
- Tech Talk: Assets When a 403(b) Is Terminated
- 403(b) Distributions Before Attaining Age 59½
- Hardship Distributions
- Distributions for Adoptions or Births
- How 403(b) Benefits Are Paid
- Restricting Withdrawals
- Qualified Birth or Adoption Distribution Defined
- Plans that May Offer Qualified Birth or Adoption Distributions
- Tax Consequences of Qualified Birth or Adoption Distribution
- Recontributions of Qualified Birth or Adoption Distribution
- Acceptance of Recontributions
- COVID-Related Distributions
- Qualified Individuals for COVID-Related Distributions
- Roth Hardship Withdrawals for House Down Payments
- 457(b) Payments to Retirees When the Employer Closes
- Income Tax and Roth Hardship Withdrawals
- Early Withdrawal Penalty on Roth Hardship Withdrawals
- CARES Act and 457(b) Distributions
- 457(b) NongovernmentalDistributions and Unforeseen Emergencies
- Qualified Birth or Adoption Distributions
- Balances When a 457(b) Plan Is Terminated
- Distribution Best Practices
- The Importance of RMDs
RMDs
- Income tax withholding on RMDs
- Withholding and RMDs
- RMD calculations and distributions
- Taking RMDs While Still Funding a 403(b)
- Charitable Contributions from 403(b) RMDs
- Size of RMDs as Charitable Contributions
- Deferred Annuity Values
- Aggregation and 403(b)s
- Confirming RMDs Are Processed
- Confirming an RMD Took Place
- Age at Which RMDs Cannot Be Deferred
- Does it Matter if a Participant Is Deceased for Purposes of RMDs?
- Calculating an RMD for a Deceased Participant
- Sending the RMD of a Deceased Participant
Rollovers
- Rolling over a 403(b) to an IRA
- Who controls 403(b) rollovers?
- 403(b) rollovers
- Rollovers from 457(b)s to 403(b)s
- 403(b) or 457 retiree rollovers
- Employer Role with Roll Overs
- Roth Rollovers
- IRAs and Rollovers
- Rolling Over 457 Balances
- Can Funds from an Inherited 403(b) Be Rolled into an IRA?
- Rollovers and Early Distributions
- Requesting Funds from Rollovers
- Amount Eligible to Roll Over Via In-Service Transfer
- Combining 403(b) Death Proceeds with a Traditional IRA
- Rolling Over an Optional Retirement Plan 403(b)
Transfers
- Transferring Assets from a 403(b): Part II
- Restricting 403(b) transfers
- Transferring assets from a 403(b)
- Plan-to-plan transfers Part II
- Plan-to-plan transfers Part I
- 457(b) Transfers
- 457 Transfers Between Providers
- 457(b) Transfers/Exchanges
- Non-QCCO Transfers of 403(b) Assets
- Transfers from a non-ERISA 403(b) to an ERISA plan
- Transferring Assets to a 457
- Plan-to-Plan Transfers
- Transfers from a 403(b) to a 401(k)
- Transfers Between 403(b)s
- Switching from an ERISA 403(b) to a Non-ERISA 403(b)
- What a Plan-to-Plan Transfer Is
- Transferring Fiduciary Functions
Compliance and Tax Issues
- Fiduciary responsibilities and non-ERISA plans
- 403(b) funds and bankruptcy
- Universal availability rules
- The 15 years of service limit
- Employer liability for 403(b) violations
- Waiving the 10% penalty
- Section 415 limits
- Nondiscrimination rules
- Includible compensation
- Income tax withholding and Roth 403(b)s
- Educating participants
- Post-Employment 403(b) Establishment
- Universal Availability and 457(b) Plans
- What Can Lead to a QDRO?
- Does Averaging Apply to 403(b)s?
- Automatic Enrollment and ERISA
- Filing SPDs
- 403(b) Contracts
- Asset Exchanges
- 403(b) Gains and Losses
- 403(b) Oversight of Individual Annuity Contracts and Custodial Accounts
- Fiduciary Duty but No Control of Accounts
- Oversight of Individual Contracts and Accounts
- Opting Out
- Taxation of 403(b) Death Benefits
- Can a 501(c)(3) Establish a 403(b)?
- Pre-Approved 403(b) Plans
- 403(b) Plan Restatements
- Eligibility for a Deductible IRA Contribution
- IRA Contributions for 2016
- Consequences of Adopting an ERISA 403(b) Plan
- Vesting Requirements
- Charter School 403(b)s and Forms 5500
- Tax Code and Church Plans
- Section 403(b) and DB Plan Service Credits
- Participation by Substitute Teachers
- Reporting for 403(b)s
- Relief for Those in Disaster Areas
- Can Self-Employed Ministers in 403(b)s Be 5% Owners?
- Plan Years for 403(b)s
- Universal Availability Notices
- Returning Retirees’ Participation in Retirement Plans
- Are 403(b)s Voluntary or Employer-Sponsored?
- Effect of 2017 Tax Law
- Can a Local Government Change its Retirement Plan?
- The Difference Between 403(b) and 403(b)(7) Plans
- Arrangements that Need To Be Listed on Pre-Approved 403(b) Restatements
- Special Effective Dates Addendum/Appendix for 403(b) IRS Pre-Approved Restatements
- 457 Plan PLRs
- 403(b) as a Successor Plan
- Can a 403(b)(7) Offer a Stable Value Fund?
- 403(b) Participation and Worker Classification
- Retirement from Optional Retirement Plans
- Updating the 403(b) Plan Document
- Plans for an Employer with Multiple Chapters
- Qualities to Look for in a Plan Auditor
- Universal Availability Defined
- Who Can Participate in a 403(b) Plan?
- When an Employee Can Join a 403(b)
- The Written Plan Requirement
- Unitization of 403(b) Portfolios
- Automatic Enrollment and 403(b)s
- Application of Nondiscrimination Rules
- Allocation Models
- Implications of Unitization for 403(b) Plans
- Optional Features Under Safe Harbor Arrangements
- Choices That Must Be Offered to Participants
- Investment of 403(b) Plan Assets
- Can You Limit what an Auditor Reviews?
- Rolling Over into a 457 (b) After Retirement
- Reporting Commissions on the Form 5500SF
- Using Plan Assets to Pay 457(b) Plan Admin/Legal Expenses
- Staying in Compliance when Setting up a 403(b) Plan
- Transferring Assets from an Employer's non-ERISA 403(b) to its New 403(b)
- Employee Benefit Plan Audit Engagement Letters
- Auditor Qualifications
- 403(b) Plans and Optional Retirement Plan Provisions
- What Happens After an Audit Is Conducted?
- Contract Exchanges with a Non-Payroll Slot Vendor
- Participation in a 403(b) Plan
- Benefits of Contributing to a 403(b) Plan
- Participating in a 403(b) Plan
- Includible Compensation for the Most Recent Year of Service
- Most Recent Year of Service
- Most Recent Year of Service When Part-time or Employed only Part of the Year
- Most Recent Year of Service for Employees not yet Employed for one Year
- Transferring Payouts to a Third Party
- Tech Talk: 403(b) Plans and Modeling Tools
- 403(b)s and the Rule Set in 2020 for Death Benefits
- Reducing the Risk of Fraud and Loss to Retirement Accounts
- Operational Review
- Key Feaures of an ERISA 403(b)
- Meaning of ‘Written 403(b) Plan
- Written 403(b) Plan Required Elements
- 403(b) Plan Optional Features
- What Adoption of a 403(b) Plan Document Means
- Proof of Timely Adoption
- The 403(b) Pre-Approved Plan Process
- Responsibilities of Plan Fiduciaries
- Fiduciary Duty Concerning Investments
- Interim Amendment for Pre-Approved 403(b) Plans
- What Is an Interim Amendment?
- 403(b) Plans and Nonforfeitability
- Administrative and Investment Fees That May Be Charged
- 403(b) Plan: ERISA or Not ERISA?
- Examples of ERISA vs. Non-ERISA 403(b) Plans
- Government Agencies Involved with 403(b)s
- Internal Controls
- Procedures a 403(b) Plan Sponsor’s Internal Controls Should Cover
- Timing of 457 Plan Adoption
- Optional Provisions in a 457 Plan
- Plan Document Tips for 403(b) Individually Designed Plans
- 403(b) Pre-approved Plan Procedures
- 457 (b) Plan Document Tips
- Documents to Save
- Tips on Maintaining Records
- Documents to Retain Indefinitely
- What Constitutes a Fiduciary
- 403(b)s and Public Healthcare Districts
- Consequences if a 403(b) Plan Sponsor Lacks the Credentials to Have the Plan
- Actions to Take When Lacking Credentials to Have a 403(b) Plan
- IRS Determination Letter Program
- The Purpose of a Remedial Amendment Period
- Eligibility for Retroactive Correction
- Aggregation and 403(b) Plans
- Tips for Audits Related to Aggregation of 403(b) Plans
- What to Know About a Governmental 457(b) That’s Under Audit
- Regulation and Oversight of 403(b) Plans
- 457 Plan Written Documents
- IRS Letter Ruling, Defined
- Closing Agreement, Defined
- Determination Letter, Defined
- Scope of Determination Letters for 403(b) Plans
- Circumstances Under Which the IRS Does Not Issue a Determination Letter
- Information Letter, Defined
- Nonbank Trustee Approval Letters
- Notice Requirements Regarding Interested Persons that Apply only to 403(b)s
- Comments Regarding Advance Determinations on 403(b)s
- Notice Requirements and Applications for Advance Determinations
- 403(b) Notice Requirements that Apply to Interested Persons
- What Is a 403(b) Prototype Plan?
- Obtaining Opinion and Advisory Letters
- Ability of a K-12 Public School to Have an ERISA or Non-ERISA 403(b)
- Can Life Insurance Be Funded as a 403(b)?
- Determination Letter Program 403(b) Plans Use
- EPCRS Self-Correction Program
- Failures Ineligible for EPCRS Self-Correction
- 403(b) Compliance Checklist
- 403(b)s Subject to ERISA
- 403(b)s Not Subject to ERISA
- Agencies Other than the DOL Relevant to 403(b)s
Loans
- Bankruptcy and 403(b) loans
- Plan loan terms
- Plan loans and vendor fees
- Processing 403(b) loan defaults
- Loan defaults
- Loans from a 403(b)
- Second Loans from Retirement Accounts
- Second Loans for Those with Defaulted Loans
- 403(b) Loan Age Restrictions
- Postponing Accrual of Loan Interest
- Tax Treatment of Defaulted Loans
- Frozen Plans and Loans
- Loans from Frozen Plans
- 403(b) Second Loan Limit
- Reporting Forwarded Loan Repayments
- Loans from 403(b)s Whose Employer Sponsors No Longer Exist
Church Plans
- Need to establish a 403(b)(9) account
- Ministers' housing allowances and retirement plans
- 403(b) plans and minister's housing allowances
- Non-discrimination rules and church plans
- Church plans
- SEPs and Post-Retirement Housing Allowances
- Must Church Plans Have a Plan Document?
- Mergers of Church Plans
- Church 403(b) Plans
- Church Employees and EINs
- Does Lacking a 501(c)(3) Letter Prevent Setting Up a 403(b) Plan?
- Should a Self-Employed Minister Open a 403(b)(9)?
- Pastor Retirement
- Discretionary Contributions to Church 403(b)s
- Church Plan Basics
- Qualifying as a Church Plan and the 403(b) Plan Document
- Sources of Funds for a Church Plan Hardship Withdrawal
- Legislation Affecting Church Plans
- PATH Act and State Laws on Church Plans
- Church Plans and Automatic Arrangements
- Can 403(b)(9) Retirement Income Accounts Be Church Plans or Can They Offer a MEP?
- Can Jail Ministries Qualify as Church Plans?
Deselected and Orphan Accounts
IRAs
- Rolling IRAs into inherited 403(b)s
- IRA rollover
- Forms to Use in Establishing a SIMPLE IRA
- SIMPLE IRA Rules
- Eligibility to Contribute to a Roth IRA
- Churches and SIMPLE IRAs
- Deemed IRAs in Qualified Retirement Plans
- Employer Signatures on IRA Adoption Agreements
- Five-Year Holding Period
- The New Rule for Correcting IRA Excesses
- Non-Spouse Beneficiary Combining a Governmental 403(b) and a Traditional IRA
- The Contribution Rules for Payroll Deduction IRAs
- Deemed IRAs
Annuities
Top Hat and Executive Plans
- Matching contributions to top hat plans
- Top hat plans
- Executive retirement plans
- Non-governmental 457(b) Top Hat Plans
- Changing the Commencement Date of Non-Governmental 457(b) Top Hat Plan Elections
- Transfers to a Non-Governmental 457(b) Top Hat Plan
- Top Hat Plan Delays in Transfers
- Can Top Hat Plan Distributions Be Accelerated?
- What Is a Top Hat Plan?
- Interest in Adopting a 457(b) Top Hat Plan
- What are the basic rules for a 457(b) top hat plan?
Social Security and Medicaid
- 403(b) deferrals and Social Security
- Handling the Social Security income threshold
- Protecting 403(b) assets from Medicaid calculations
- Social Security and 403(b) contributions
- Contributions and Social Security
- Impact of the Social Security Statement
- What Does Insolvency of the Social Security System Mean?
State-Specific Issues
Miscellaneous
- Implementing a 401(a) plan
- Benchmarking participant attrition rates
- Choosing between health insurance and a 403(b)
- Who's a teacher's employer, the state or the district?
- Managing 501(c)18 pension trusts
- Annual Meaningful Notice
- Bankruptcy and 403(b) Assets
- Approved Representatives
- Protection from Bankruptcy
- Cybersecurity Program Best Practices
- Tips for Hiring a Cybersecurity Service Provider
- Terms to Include in a Contract with a Cybersecurity Service Provider
- Strategies for Providing Information to Participants
- Holding Effective Virtual Meetings
- A Deeper Look at Fees
- Working with Vendors on Cybersecurity
- Choosing the Right Plan
- Protecting Sensitive Data
- Benefits of Multiple 403(b) Providers
- Best Practices Concerning Multiple 403(b) Providers
- Information on Investment Options
- Why Do a Plan Review?
- Who to Invite to a Plan Review
- Running a Plan Review Meeting
- Questions to Anticipate at a Plan Review Meeting
- 403(b) Plan Investment Options
- 403(b) Plan Service Providers
- Fees 403(b) Service Providers Charge
- Surrender Fees
- Helping Employees to Pursue Financial Wellness
- Financial Literacy Is Key
- Functions of 403(b) Service Providers
- Types of Fees That 403(b) Plan Services Providers Charge
- GAO on Fees for 403(b) Plans
- 403(b) Service Providers
- Permitted Investments in 403(b) Plans
Recent Comments
Does the roth requirement for catch-up contributions for people who earned $145,000 apply to 457...
Hi Ed,
I really liked this article and I think you make a lot of sense. And I had no...
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