It’s still early in the year, and a recent blog entry offers some ideas about things that 403(b) plan sponsors should be aware of and consider acting on this year.
In “A New Year’s “To Do” List for 403(b) Plan Sponsors,” Evan Giller writes on Boutwell Fay LLP’s blog, offers some ideas concerning maters he thinks merit special attention this year.
Plan Document Restatement
The deadline for restating plan documents is March 31, 2020, the end of the remedial amendment period (RAP) the IRS provided for 403(b) plans. Under the RAP, Giller notes, it is possible to amend or restate a 403(b) plan document in order to retroactively correct defects. The document may be retroactively adopted all the way back to the first day of the RAP, Jan. 1, 2010.
Compliance Check
Giller advocates conducting a compliance check of how the plan operates and making sure that it is functioning in accordance with the plan provisions. And, he adds, restating a plan document “presents an excellent opportunity to make sure that the plan is being operated in accordance with the terms of the document.”
SECURE Act
The SECURE Act was enacted just before Christmas, and it affects retirement plans — including 403(b)s — in a variety of ways, including:
- a change in the age for required minimum distributions;
- allowing custodial accounts to be distributed to participants after a plan is terminated; and
- new rules that provide a fiduciary safe harbor for the choice of the lifetime income provider and allow lifetime income contracts to be rolled into another plan or IRA under certain circumstances.
Giller suggests performing an analysis to see how the new law affects a plan.
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