Data Sharing FAQs
IRS requirement: You must approve participant loans, hardships, transfers, and other distribution requests
Before the final regulations were released, participants could request distributions directly from their investment providers without plan sponsor involvement or approval.
But now, the final regulations stress that these are employer-sponsored plans, so all disbursements to participants under your 403(b) plan must be centrally coordinated. The IRS will no longer allow plan participants to authorize their own distributions without review and approval by their employer. Instead, you must determine:
- whether an employee’s circumstances qualify for taking a hardship withdrawal, distribution, or a loan;
- whether a transfer is permitted under the terms of the 403(b) plan and IRS rules; and
- whether a domestic relations order has sufficient information to enable benefits to be set aside for an alternate payee under a Qualified Domestic Relations Order (QDRO).
In addition, the IRS has modified the rules on exchanges, (formerly referred to as 90-24 transfers), within your 403(b) plan. If you allow exchanges among vendors in your 403(b) plan, you must share information with the vendors receiving exchanges about:
- employment status so a vendor knows when an employee is allowed to take a distribution from the 403(b) plan;
- an employee’s hardship withdrawal request so that a vendor knows whether you have approved such a withdrawal; and
- any outstanding loans or account balances among vendors in your school’s 403(b) plan, 401 plan, and 457 plan in order to determine the amount available for a new loan from the 403(b) plan.
ING U.S. solution: planwithease.com® and recordkeeping
You don’t have to cope with these unfamiliar tasks alone. ING U.S. is here to help ease your transition to working under the new 403(b) plan administration requirements.
To help you coordinate all of your approved 403(b) vendors, ING U.S.'s planwithease.com® will:
- monitor your participants’ annual contributions to your 403(b) plan;
- determine whether distribution, loan and transfer and/or exchange requests are permitted by your 403(b) plan and the IRS 403(b) rules;
- alert you to minimum distributions each year;
- and more.