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  1. www.pensiononline.com/401khelpcenter/tpadirectory/index.asp Select "Service 403(b) Plans" to narrow your search
  2. Based on the reference to 401(k) adp/acp testing, it's understood that this is a 457(b) top-hat plan for a 501© tax-exempt organization and not a governmental 457(b) plan. If the 457(b) plan contributions were reported and handled correctly, the distribution amount should be reported through payroll on the employee's W-2. The distributed amount should be included on the W-2 in box 1 & 11 (excluded from box 3 & 5). The tax withholding should be done in accordance with the employee's most current W-4. The employer is not required to pay any additional taxes on the distribution. The employer should have already paid their portion of FICA on all of the 457(b) plan contributions (including any employer contributions) when the contributions were made.
  3. Vanguard does not provide a 403(b) plan document for their 403(b)(7) program. In their set-up paperwork, they disclose that: "Vanguard is not responsible for creating, reviewing, or executing plan documents." I like your idea to use Oppenheimer as a 403(b) provider and then adopting their 403(b) document. Also, despite the fact that their product expenses may be a bit excessive, you may also want to explore whether any of the 2 current 403(b) vendors may be able to provide your organization with a complimentary 403(b) plan document. The deadline to have the 403(b) document in place was December 31, 2009. Therefore, the sooner one is adopted the better. If you are still in need of a 403(b) plan document after exhausting these other possibilities, please fee free to respond for further assistance.
  4. Although you provided great detail, it’s not clear why the finance manager will not add the Vanguard 403(b)(7) if you and your colleagues asked for it. The Vanguard 403(b)(7) new account form, plan authorization form and information-sharing agreement appear to be pretty straight forward. If need be, a TPA can be designated on the plan authorization Form. I question the need for a TPA if your plan is truly a salary deferral only non-ERISA 403(b) plan. Limiting the number of vendors may cause the 403(b) plan to lose its ERISA exemption. However, I heard that this should not be the case as long as at least 2 vendors remain. TPA services are typically needed by 403(b) plans subject to ERISA due to the new IRS Form 5500 annual reporting requirements for 403(b) plans. A TPA may also provide other services to non-ERISA 403(b) plans to help alleviate some of the administrative burdens on the plan administrator. These 403(b) TPA services may include: plan document; information sharing agreements; vendor monitoring and information exchange; contribution remittance; annual limits monitoring; universal availability notices; loan/hardship processing; etc. In regards to your first question, in my opinion, the biggest change in 2009 was the announcement of 403(b) prototype plan program. This means that in sometime in the near future each organization sponsoring a 403(b) will either have to adopt a pre-approved plan or request an IRS determination letter on a customized plan once program is available. This means more decisions by the organization and possibly more costs if they don’t adopt a "free" prototype plan offered by one of the 403(b) vendors. If you go with a TPA, my advice would be to find out what the TPA will provide for the fee they charge. $1,200 appears reasonable for the number of plan participants but it really depends on the services provided. In regards to choosing another 403(b) program other than Vanguard, I would have thought that the OppenheimerFunds 403(b)(7) would have been a good alternative. Keep in mind when comparing 403(b) products, you need to also examine whether or not a separate account charge or mortality & risk expense is also charged in addition to the fund management fees. Best of luck!
  5. TIAA-CREF posted information about the written plan requirement for church plans on their web site - TIAA-CREF News - on August 8, 2008. I'm not sure if this is their opinion or if they found specific language in the final 403(b) regulations that supports the information they distributed. Here's an excerpt of what they wrote: "... Qualified church organizations that sponsor an IRC section 403(b)(9) retirement income account must adopt written 403(b) plans by January 1, 2009. However, based on , it appears that the written plan requirement imposed by the final 403(b) Regulations does not apply to an IRC section 403(b) plan funded with 403(b)(1) annuity contracts and/or 403(b)(7) custodial accounts sponsored by a QCO. In other words, these organizations do not have to have a written plan (unless they elect to have the plan be subject to ERISA) unless the plan is funded with a 403(b)(9) retirement income account."
  6. Lola- I work for a third party administrator (TPA) for retirement plans, including 403(b) plans subject to ERISA, in the upstate NY area. If you have difficulty finding a local TPA that meets your needs, you may want to look outside of the CA Bay area. Best of luck! -Phil
  7. Agreed. If what you described was an option, it wouldn't seem to make much sense since the amount withdrawn to pay off the loan would be a taxable distribution.
  8. They need to report the aggregate participant distributions each year on the Schedule I – line 2(e) "Benefits paid (including direct rollovers)". The fact that they are individually owned contracts vs group contract or custodial accounts has no impact on the reporting requirements. The 403(b) provider should have a group or plan number associated with each individual 403(b) contracts. The company may need to request a group or plan activity report at the end of the year from their 403(b) provider to prepare their 5500. Many 403(b) providers, including TIAA-CREF, had to update their plan sponsor reporting to meet this new challenge. The bigger challenge is when there are multiple 403(b) vendors involved.
  9. A tax exempt employer such as a non profit organization under IRC 501©, including 501©(6), would be eligible to establish a 457(b) plan for "top hat" management. The IRS has a web page in the Retirement Plan Community section devoted to IRC 457(b) Deferred Compensation Plans at www.irs.gov/retirement/article/0,,id=172437,00.html Also, you may want to check out the IRS Retirement Plans Navigator at www.retirementplans.irs.gov/choose-a-plan/tax-exempt-plans/457b---tax-exempt-organizations-non-church/
  10. Yes, unless the provision in your client’s 403(b) plan states otherwise, in-service withdrawals are typically available upon attaining age 59½. Technically, the transaction would not be a transfer but a rollover. Since your client plans to continue to contribute to the 403(b), check with the 403(b) provider to see if a minimum account balance must be maintained in order to keep the account active.
  11. Correct. If you contribute $15,000 to your 403(b) plan and $15,000 to your 457 plan, the $30,000 will not be included as income on your tax form 1040 line 7. The amount to enter on line 7 should be shown in box 1 of your w-2. Box 1 of your w-2 will not include elective deferrals such as contributions to a 403(b) or 457(b) plan. If you participate in both plans, you can defer up to $16,500 under each plan ($33,000) in 2010. If you over age 50, you can also make a catch-up contribution of $5,500 to the 403(b) and if your employer is governmental, an additional $5,500 to the 457(b).
  12. TPA NY


    Consulting with an employee benefits attorney may be recommended. For residents of a community property state such as California, a beneficiary designation of a 457(b) plan may be subject to challenge in some 457(b) plans if the spouse would consequently receive less than the share of the benefit attributable to community property. If the brother is a reasonable person, he should be asked to disclaim his share as the primary beneficiary of the 457 account. Unless there were other living primary or contingent beneficiaries named in the designation of beneficiary form, the widowed spouse should be entitled to the claim the 457(b) benefits. If the brother is unreasonable, have your friend contact the 457 plan administrator and/or the 457 provider and inform them that she would like to challenge the brother’s beneficiary claim. If the plan administrator or custom service representative is not helpful, she should insist on speaking with the 457 provider’s customer service manager or a tax attorney in the organization’s home office. If your friend is uncomfortable speaking with someone about this matter, sending a certified letter to the 457 plan administrator and/or the 457 provider may be just as effective. Failure to change the designated beneficiary in a retirement account (457b, 403b, 401k, IRA, etc.) after a life changing event often results in unintended consequences. The 2009 U.S. Supreme Court case of Kennedy vs DuPont Savings and Investment Plan is a perfect example of why updating a beneficiary designation is so important. In this case, the Supreme Court agreed that the ex-wife be awarded all of her ex-husband’s retirement plan benefits despite the fact she waived all claims to the retirement benefits in their divorce decree.
  13. TPA NY

    457(b) Deferrals

    No. You are not processing the W-2 appropriately. The W-2 instructions states: "Amounts deferred (plus earnings) under a nonqualified or section 457(b) plan must be included in boxes 3 and/or 5 as social security and/or Medicare wages as of the later of when the services giving rise to the deferral are performed or when there is no substantial forfeiture risk of the rights to the deferred amount. Include elective and nonelective deferrals for purposes of section 457(b) plans." Also, the 457(b) deferral amount should be reported on box 12 with a code G.
  14. 5500 preparation is not my specialty but the distributions as a result of the Plan Termination should be reported for the plan year the distributions are made. Therefore, if the distributions are made in 2010, they should be reported on the on the 5500 Schedule I for 2010 only (not the 2009 Schedule I).
  15. This may be acceptable but it depends on how the 457(b) plan is written. If the plan has a plan termination provision as described in the final 457 regulations (published 7/11/03), all deferred 457 accounts must be distributed as soon as administratively feasible after the plan termination. Absent of this plan termination provisions, 457 plans usually allow for the deferment of benefit payments up until the required mandatory distribution (attainment of age 70½). However, there may be some administrative issues with the 457 account since the accounts are typically owned by the NP for the exclusive benefit of the 457 plan participant (top-hat employee). Therefore, the NP may have to provide the 457 provider with a blanket authorization to distribute the account upon the participant’s instructions at a later date. Then the NP would need to arrange that the 457 provider or a third-party administrator issue the w-2 to the top-hat participant for the tax year that the distribution is made. In regards to the reporting requirements (5500) for a terminating 457(b), a 457(b) top-hat plan is not automatically exempt tom the reporting and disclosure but a one-time filing exemption is typically filed with the Secretary of Labor immediately after the plan is set-up.
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