For the first time, the Internal Revenue Service (IRS) has pre-approved prototype plan documents for 403(b) retirement plans. The plan restatement requirement is happening now as a long-overdue response to many years of lobbying by retirement plan sponsors and service providers. The IRS’ goal is simple — to create a model blueprint like what has been available to 401(k) plans for decades. In order to have assurance that your plan is compliant with the new regulations, and your investments are safe, your plan document must be reviewed and restated to an IRS pre-approved document by June 30, 2020. By adopting an IRS pre-approved 403(b) plan by the last day of the remedial amendment period – June 30, 2020 – the IRS remedial amendment program allows an eligible employer to retroactively correct defects in the form of its written 403(b) plan back to the first day of the plan’s remedial amendment period, which is the later of January 1, 2010 or the plan’s initial effective date. Only employers that adopt an IRS pre-approved 403(b) plan by June 30, 2020, will have assurance that their documents satisfy the Code Section 403(b) written plan document requirements.

While initially there was no formal IRS approval process for 403(b) plans, the implementation of Revenue Procedure 2013-22 established a program for pre-approved ERISA and Non-ERISA 403(b) plan documents. Under this program, after pre-approval by the IRS, the eligible employer would be required to adopt an IRS pre-approved plan. This new process is referred to as “restatement” or “remedial amendment” and the restatement period deadline is on June 30, 2020.

Take the Next Steps:

• Review your plan with your service provider and/or advisor.
• Contact your plan provider to confirm that your plan has been approved with the IRS.
• File your plan with the IRS by the June 30, 2020 deadline.

Kaci Skidgel, C(k)P®, QPFC, AIF®, President