IRS Relief for 403(b) Retirement Plans

March 2013

Recognizing that the requirement to have a detailed written plan document for a 403(b) retirement plan was a new and arduous task for many non-profit entities who sponsored such plans, the IRS has now published favorable guidance giving 403(b) retirement plan sponsors some much needed relief.


Under new IRS regulations issued in 2007 (the “New Regulations”) and subsequent IRS announcements, 403(b) retirement plans were required, no later than December 31, 2009, to have a written plan document in place that reflected the New Regulations. For many non-profits who sponsored such 403(b) retirement plans, this was a new and complex compliance requirement that required time intensive work by the non-profit and its retirement plan providers and other vendors. Some non-profits never before maintained formalized written plan documentation regarding their 403(b) retirement plans (and such documentation was generally not previously required by the IRS), while others had old documents that were not necessarily reflective of current law or current administration pertaining to the 403(b) retirement plan.

Subsequent to the December 31, 2009 written plan document requirement for 403(b) retirement plans, 403(b) plans, like many other defined contribution retirement plans (e.g., 401(k) plans), were required to be formally amended for certain legally required provisions by certain IRS-imposed deadlines. For example, for calendar year plans, amendments with respect to the Heroes Earnings and Assistance Relief Tax Act of 2008 (“HEART”) were required to be adopted on or before December 31, 2010, and amendments relating to certain provisions of the Worker, Retiree and Employer Recovery Act of 2008 (“WRERA”) were required to be adopted on or before December 31, 2011.1 Additional legally required amendments are likely to be required in subsequent years.

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