The December 31, 2008, deadline for adopting a written plan document for 403(b) plans is rapidly approaching. The plan document requirement applies to both Employee Retirement Income Security Act (ERISA) 403(b) plans and non-ERISA 403(b) plans. The December 31 deadline is applicable to both calendar and fiscal plan year end plans.
The plan document must comply with the final 403(b) regulations’ content requirements relating to eligibility, benefits, contributions, timing and form of distributions, and the optional features (e.g., hardships and loans) of the plan. The Internal Revenue Service has clarified its position that the written plan document requirement can be satisfied by permitting a plan to incorporate by reference other documents, including the insurance policy or custodial account. Plan sponsors must ensure that there is no conflict between the plan and the documents incorporated by reference.
Click here to view the final regulations published in the Federal Register on July 26, 2007 . Click here for McDermott's On the Subject on 403(b) plans.