What is a 403(b) Retirement Plan?

A 403(b) Plan is a type of defined contribution plan where the employee is able to make salary deferrals and the employer is able to make additional discretionary company contributions.

What are some unique characteristics of a 403(b) Plan?

There are two-types of 403(b) plans;

1. 403(b) plans subject to ERISA
2. 403(b) plans not subject to ERISA

403(b) plans subject to ERISA have to comply with all the testing and reporting requirements of ERISA and are also afforded the protection ERISA provides.

Except for “church plans”, all 403(b) retirement plans with employer contributions are subject to ERISA.

Non-ERISA 403(b) plans are exempt from having to follow the reporting requirements of filing a Form 5500 annually and are not covered underneath ERISA law.

Employee salary deferrals must be broadly available to all employees. This means the employer must allow those employees that reach 1,000 hrs of service in a year and are older than age 21 into the plan.

Employer contributions are completely discretionary and may subject an employer to being covered by ERISA.

What are the new rules and regulations affecting 403(b) plans?

New legislation has made 403(b) plans to look and feel much more like 401(k) plans, with a few exceptions.

Nearly all 403(b) plans, ERISA and non-ERISA alike, have new requirements in both form and operation that must be followed.

All 403(b) plans must now have a plan document. This new regulation is easily complied with as plan documents are readily available.

In addition, all plans covered by ERISA will have additional reporting requirements on the Annual Return Form 5500. This regulation proves to be more onerous as now Sponsors of 403(b) plans are required to be more complete in the information they are providing.

How can Trinity Pension Consultants help?

Since 403(b) plans have had increased requirements, many employers have been left scrambling to know exactly what they are supposed to do. Trinity can help answer your 403b plan questions on regulations, 403b transfers, 403b rollovers and more.

Trinity Pension Consultants can help you:

• Prepare and draft a 403(b) plan document
• Help you determine whether your plan is covered by ERISA or not
• Provide consultative advice on whether a 403(b) plan is still the most appropriate plan design
• Provide annual administration, testing and preparation of Form 5500
• Provide ongoing administration support

For more information on how Trinity Pension Consultants can help you with a 403(b) Plan, call Anthony Warren at 330-869-3747.