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    Time to Restate Your 403B Plan

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    The Internal Revenue Service set March 31, 2020 as the last date of the remedial amendment period for tax-exempt organizations and public school systems to self-correct plan document defects in their Section 403(b) plans.  The “remedial amendment period”, or “RAP” is a period during which a 403(b) plan can be amended to comply with the technical requirements of Section 403(b) of the Internal Revenue Code and related IRS regulations.  Plan sponsors will have until March 31, 2020 to amend their individually designed 403(b) plans, or adopt pre-approved  403(b) plans, to correct any defects as to the plan’s form, retroactive to January 1, 2010, or, if later, the plan’s initial effective date.

    To take advantage of the RAP, plan sponsors must have adopted a written 403(b) plan by December 31, 2009 (or the effective date of the plan, if later).  If this timing requirement has not been met, plan sponsors must correct the plan’s violation under the IRS’ Employee Plans Compliance Resolution System (EPCRS).  EPCRS is also available to correct operational errors, including failure to satisfy nondiscrimination testing requirements.

    Now is the time for plan sponsors of 403(b) plans to carefully review plan provisions to determine whether the plan’s provisions reflect how the plan has been administered and operated.   If discrepancies exist, or other operational changes are needed, plan sponsors should to amend the plan/adopt a pre-approved plan before the end of the RAP.

    The post Time to Restate Your 403B Plan appeared first on Employee Benefits.

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