As the years proceed, the employer may wish to amend the plan document to include or delete certain plan features or provisions. These are voluntary amendments.
So, for example, the employer may choose to add Roth elective deferrals, or loan provisions or delete one of these from the plan. The board should adopt the amendment and the employer must re-execute the plan’s documents or adoption agreement indicating the change and the effective date of the change. Caution should be taken to make sure that the adoption date of the amendment is before the effective date of such changes.
Additionally, law changes and/or IRS guidance may require the amendment of the 403(b) plan by certain deadlines so the plan may continue to meet tax qualification requirements. If an update is necessary, the 403(b) pre-approved plan document provider must amend the plan and notify the employer/plan sponsor of the amendment, or updated plan document, and obtain required signature(s), if applicable.
Editor’s Note: This is an occasional feature in the NTSA Advisor. This tip is taken from the 403(b) Plan Sponsor Guide, which is being made available to school districts nationally to assist them in understanding how to improve 403(b) plan participation and savings rates to help employees achieve a comfortable and timely retirement.
The 403(b) Plan Sponsor Guide is part of the content contained in the NTSA Certified Retirement Education Specialist (CRES) materials. The NTSA Certified Retirement Education Specialist (CRES) program and designation has been developed in order to equip advisors to be qualified and available to teach the NTSA educational program, which is designed to provide teachers with the basics of planning for retirement and improve their retirement readiness. More information about CRES is available here.
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