Meeting Challenges in the 403(b) and 457 World

Running any employee benefit plan, and serving one, entails challenges—and that certainly is true of 403(b) and 457 plans. A Feb. 7 session of the 2022 NTSA Summit in Phoenix, AZ featured a panel discussion concerning some of them. 

Panelists included John Adzema, President, National Associates, Inc.; Sue Diehl, President, PenServ, Inc.; Ed Salyers, CPA; and Teresa Ward, Senior Director, Retirement Programs, Invesco. 

Communication 

Communication is key, panelists suggested. 

“Anything that would be a common error I want to discuss with an employer,” said Salyers. To that end, Diehl suggested sitting down with an employer and reviewing a plan line by line. Adzema suggested asking a variety of questions, including whether all plan assets are accounted for, and who has them. 

Details, Details

Details matter, the panel said. Diehl argued that an examination of compensation will often find that something is not being done as the plan stipulates. Similarly, Ward suggested making sure that the right TPA is listed in, and by, the plan. 

Explicitly spelling things out is helpful as well, panelists suggested. “Have information sharing agreements between providers,” said Adzema. 

Details can be subtle or even take some work to discover, Diehl indicated. For instance, the name of a plan may not tell one everything one may think. To wit: a plan name may suggest that a plan is a church plan, but it may not be one regardless. By the same token, some plans with innocuous names may have a connection to a church, cautioning, “You may have church plans lurking.” This matters, Diehl said, because church plans don’t have to file a Form 5500 and are not subject to nondiscrimination rules and testing. 

“There’s a lot to unpack from a variety of perspectives,” said Ward. 

Roles to Play 

It also can be worthwhile to set forth what roles people play in such processes, panelists pointed out. Diehl reminded that recordkeepers don’t always perform all the functions a TPA would. Adzema suggested stipulating who does the reporting, and Salyers advised “saying up front that you really need someone who knows the system.”