Education Market Reg Solutions
The final Internal Revenue Service 403(b) regulations mean big changes in how your 403(b) plan must operate.
With the final IRS regulations generally in effect January 1, 2009, the IRS will expect plan sponsors to be very involved in operating their 403(b) plans. These regulations impose greater responsibility on you for managing information and duties related to your public school (which includes public primary and secondary schools, state colleges, state universities, and public junior colleges) 403(b) plan, including:
- Written documentation of plan features
- Approval of loans, hardship withdrawals, transfers and other distributions
- Notices sent annually to remind your employees about their ability to save for retirement through your 403(b) plan.
These new tasks will mean more work for you and your staff—and, because the IRS will be auditing plans, more accountability as a plan sponsor.
Evaluating your current providers
As you evaluate your 403(b) plan, you may want to send a “Vendor Questionnaire” or “Request for Proposal” (RFP) to your current investment and service providers to help determine whether they can continue to meet your needs – and those of your 403(b) plan participants – under the IRS regulations.
At ING U.S., we welcome the chance to answer any questions you may have about how our 403(b) investment options and plan administration services can help ensure your plan remains in compliance with the regulations.
We have developed the following sample documents based on the thousands of RFPs and questionnaires we have received over the years. We are happy to provide these for your review/use in helping you determine which providers you want to work with going forward. Each has a slightly different focus:
- First, sponsors generally send a Vendor Questionnaire to their existing providers to determine basic capabilities.
- Next, sponsors will often choose a vendor or third party administrator to provide plan administration services - including common remitter service - by sending a Plan Administration Services RFP.
- Next, sponsors will send a formal Education 403b Request for Proposal to select vendors to provide products and services in compliance with the final 403(b) regulations.
Please note: This document is customized for Education 403(b) plan sponsors and is based on questions created by the SPARK Institute, a well-known industry trade association focusing on the defined contribution plan market.
These materials are not intended to be used to avoid tax penalties, and were prepared to support the promotion or marketing of the matter addressed in this document. The taxpayer should seek advice from an independent tax advisor.
Insurance products, annuities, and retirement plan funding options issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company, One Orange Way, Windsor, CT 06095-4774. Annuities issued by ReliaStar Life Insurance Company, 20 Washington Avenue South, Minneapolis, MN 55401. Securities offered through ING Financial Advisers, LLC (member SIPC), and other broker-dealers with which it has selling agreements. These companies are members of the ING U.S. family of companies. Insurance obligations are the responsibility of each individual company. Products and services may not be available in all states.