403b Plans
Is it appropriate to name a living trust as beneficiary of a 403(b) account? In Tech Talk, Ellie Lowder tells us whether this should be done in order to escape probate on 403(b) distributions.
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Suppose you have a client who is age 55 and is retiring but has an agreement to return to work with the same employer to do a special project for them. Can he make withdrawals between retiring and starting the project without the 10% IRS premature distribution penalty tax being imposed? In Tech...
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What are the universal availability rules, and how do they work? An upcoming IRS webcast will discuss their intricacies. On May 19 at 2:00 p.m. EDT, three senior staff members from the IRS Office of Employee Plans will address these rules in “Understanding the Universal Availability Rules in a...
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You have a client who is preparing to declare bankruptcy. Are his 403(b) assets protected? In Tech Talk, Ellie Lowder tells us.
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Suppose you have a client who left his employer at age 53, and will be 55 this year. He would like to make withdrawals from his 403(b) account without the IRS penalty tax being imposed. In Tech Talk, Ellie Lowder tells us if he can.
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Do any issues arise if a 73-year old client is still funding his 403(b) while he is taking required minimum distributions (RMDs)? In Tech Talk, Ellie Lowder tells us.
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The Board of Governors of the Federal Reserve in its latest quarterly report about U.S. financial accounts, provides information on how state and local government defined benefit and defined contribution funds — 403(b) and 457 funds — fared from a variety of perspectives during the fourth quarter...
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You have a client who is severing employment in the year he turns 55, but before his birthday. Will his withdrawals from his 403(b) be subject to the 10% penalty tax? In Tech Talk, Ellie Lowder tells us.
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IRS Employee Plans Division (EP) Rulings & Agreements Director Karen Truss on March 1 issued a memo to EP determinations employees that sets forth interim guidelines they are to use in processing 403(b) pre-approved plan applications for opinion and advisory letters regarding spousal benefit...
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Suppose that the product provider of a 403(b) plan which allows only elective deferrals wants the plan sponsor to begin approving loans and hardship withdrawals. In Tech Talk, Ellie Lowder tells us what impact that action would have on the plan’s ERISA exemption.
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On Feb. 23, 2016, the American Retirement Association (ARA) filed a comment letter with the IRS suggesting enhancements that can be made to the IRS pre-approved plan program for plans subject to Internal Revenue Code Sections 401(a) or 403(b). The letter also requests a meeting to discuss the ARA...
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Many employees of a school district client elected to make a Roth 403(b) salary deferral, but they were all set up as regular pre-tax deferrals and no one caught this for six months. In MarketBeat, Susan Diehl tells us if the employees can change their election to pre-tax as a way to correct the...
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The IRS recently released Notice 2016-16, which addresses what can and cannot be amended in a safe harbor 401(k) or 403(b) mid-year. In MarketBeat, Susan Diehl provides an overview of this notice, which includes guidance for traditional safe harbor plans and QACAs and eliminates much of the...
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A company allows employees to repay the defaulted loans and then allows them to take out a second loan which is repaid via checking/savings account deductions. In Tech Talk, Ellie Lowder tells us if this permitted.
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The PATH Act made extraordinary and fundamental changes to church 403(b) plans. In MarketBeat, Robert Toth writes that merging 403(b)s and 401(a)s has been an ongoing issue in the tax-exempt marketplace, and discusses how the Internal Revenue Code now will allow such mergers and the transfer of...
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A client wants to make a withdrawal from her 403(b) to help pay for her daughter’s higher education. In Tech Talk, Ellie Lowder tells us if such a withdrawal would incur a 10% penalty tax.
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A recent study outlines what employers can do to help limit plan leakage by placing significant limitations on loans in their plan documents. In MarketBeat, Ellie Lowder suggests that 403(b), and perhaps governmental 457(b) plans as well, face the same problems and discusses what they can do.
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If a plan which sponsors an elective deferral 403(b) adds automatic enrollment to the plan, would ERISA then apply to the plan? In Tech Talk, Ellie Lowder tells us.
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The IRS has made available updated materials relevant to annual filings that 403(b) plans and certain IRA holders must make. Specifically, it has made available for 2015 filings: the instructions for IRS Form 8955-SSA, “Annual Registration Statement Identifying Separated Participants with Deferred...
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Would the 10% premature distribution penalty tax be imposed on 403(b) withdrawals made by a client who attained age 55 two months after she had severed employment from the school district for which she had worked? In Tech Talk, Ellie Lowder tells us.
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