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In The News:
IRS Publishes Sample
403(b) Plan Language for School Districts
On July 24,
2007, the IRS released final regulations
relating to 403(b) plans that are generally
effective for tax years beginning after
December 31, 2008. The final regulations
contain certain requirements that make
403(b) plans more like other defined
contribution plans, such as
401k plans. The requirements include, among
other items, that there must be a written
plan document and the plan document
must specify the terms of eligibility,
the contracts available under the plan and
the time and form of benefit
distributions under the plan.
In Revenue
Procedure 2007-71, the IRS issued model plan
language for public schools to use to create
new plan documents or amend existing plan
documents to comply with the final
regulations. The model plan language is for
a basic plan that only permits pre-tax
elective deferrals by employees. A public
school may rely on the model plan language
for compliance with the final regulations,
so long as the public school's new plan
document or amendment is word-for-word the
same as the model plan language
or substantially similar in all material
respects.
The following
are links to the final regulations and
Revenue Procedure 2007-71
Please feel
free to contact Charity McCarthy if you
would like assistance complying with the
403(b) final regulations.
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