Tip of the Week: Providing Notices

415 Notice: This requirement is not new but became the responsibility of the employer (or the TPA) beginning in 2009. This is a required notice describing the effect on an employee if they also “control” another business and have a retirement plan for that business in addition to participating in the 403(b) plan.

 

The notice should explain the effect on the employee and describe the correction if too much is contributed between the 403(b) and the other Plan. The excess must be corrected from the 403(b) plan. For example, a school teacher is self-employed as a tutor during their summers and also during the year. The teacher establishes a SEP plan for their tutoring business income. Between the contributions made to the SEP and the 403(b), the total contributed cannot generally exceed $56,000 (limit in 2019). Most 403(b) TPAs include this information on the salary deferral form or in the enrollment materials. 

 

Important Note: For years beginning after the year that the Employer restates their 403(b) Plan, this 415 Notice requirement becomes an “annual” requirement. Thought should be given by the Employer/TPA to determine what this notice will become a part of, since this will be an annual requirement. Some TPAs have now included this information in the universal availability notice as a part of their updates. 

 

Editor’s Note: This is an occasional feature in the NTSA Advisor. This tip is taken from the “Checklist for establishing, amending, and restating a 403(b) plan NTSA Advisor” that appears in the “Administration Basics Non-ERISA 403(b) for Public Schools” section of the 403(b) Plan Sponsor Guide.

The 403(b) Plan Sponsor Guide is part of 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.