New financial reporting and audit requirements for 403(b) retirement plans

Due to a new set of rules issued by the IRS, 403(b) retirement plans have recently experienced significant changes. Though these rules aim to help improve the retirement savings process for employees in the tax-exempt and not-for-profit sectors, they have also changed the way 403(b) plans are managed.

Below are questions that may determine your preparedness regarding your plan:

1. Do you know there are new financial reporting and audit requirements for the 403(b) retirement plans?
2. Do you have participant records for former employees that are entitled to future benefits?
3. Are all employees who normally work 20 hours or more per week given the opportunity to make a salary deferral?
4. Does the 403(b) annuity contract or custodial account contain the non-transferability provisions required by the IRS?
5. Are you and your vendors requiring documentation that hardship distributions meet the definitions and requirements for hardship found in the IRC 402(k) regulations?

If you answered "no" or "unsure" to any of these questions, the time to act is now. New requirements will be applicable for the 2008 plan year. Cotton + Allen can help ensure that your plan remains compliant and will help educate you and your employees on the recent changes in the rules related to your 403(b) plan.

For more information, please contact Mark Knipp, CPA, at 502.589.6050.