August 7, 2009

403(b) Filing Relief

On July 20, 2009, the Department of Labor issuedField Assistance Bulletin (FAB) 2009-02, providing some welcome relief to 403(b) plans.  Many 403(b) plans are now subject to the Form 5500 annual filing requirement.  One of the outstanding questions has been, How will the plan sponsor gather information relating to contracts over which the employer has no authority or discretion? 

This Bulletin provides some welcome relief.  Specifically, it provides that a Form 5500 annual report will not have to reflect 403(b) plan contracts issued before 2009, for which no contributions are made in 2009 or after; and, as long as the employer has no authority or control over the contract.  In other words, the relationship must be direct between the participant and the insurer, with the employer having no involvement. 

The DOL has clarified that this guidance, while referring to 2009, will be applied on a going-forward basis. 

While there are still some unanswered questions about how this will apply to group annuities, or what precisely does “no involvement by the employer” mean, it is nevertheless, very helpful guidance.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service

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