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Will New Regs Be Delayed?

New Regs Delayed?  

10 members have voted

  1. 1. Do you believe new regs will be delayed?

    • Yes
      2
    • No
      8


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The IRS is being asked by several organizations to delay the scheduled January 1, 2009 implementation of the new regulations. Do you believe the regs will be delayed?

 

Dan Otter

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Dan --

In terms of school folks, my first thought was "Who cares?" because the changes in investment options have been decided upon and few districts seem to care enough to provide no-load options for their teachers. The next thought was "Who would proft by delays?" Well, that would seem to be the districts, the insurance/ broker/dealer companies who need to get systems in place, and the TPAs. Well, let me think.... why would they need extra time? Perhaps because their efforts have been put into sales to ensure that they have a part of the market? Well, not the district staff... they have just been dealing with the sales staff, so they don't have their systems in place, largely because they have not been "advised" by the salesmen and the TPAs.

 

So I am back to "Who cares?" Given the poor investment options for staff, it doesn't matter whether the regs are delayed or not, UNLESS the staff can keep their best investment options open for a few more months.

 

Sorry to be so glum. Just talked with a couple of staff at my school district -- I have retired and not gone back this year. No one has approached or dealt with the district on the subject of 403bs.... because they don't care either. To top it off, the regional union office doesn't care, and neither does the state branch of the NEA. Sigh.

 

JudyS

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Hi Dan,

Voted no, let’s get on with this thing. What difference does it make to delay? If most districts are doing what LAUSD is doing by using a TPA, delaying the implementation will have little positive outcome. LAUSD uses the 457b TPA to get into compliance because the TPA is the common remitter for both the 403b and the 457b. If LAUSD had a delay, they would wait until the next deadline to get ready. The final outcome will be essentially the same, very few low fee companies signing on at 010109 or some future date.

 

I am hoping that when the low fee companies see that the new plan has no additional liability (than comparable plans with non K12 employers), they will come around and sign the ISAs. This has happened under the old system when the 2001 tax law passed illuminating the MEA. So, the sooner we get started the more we will know, including the IRS.

Steve

 

 

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I am not necessarily advocating for a delay, but I do wish more support had been provided smaller employers and perhaps all employers. Compliance is and will be a costly endeavor for employers. And of course I wish there had been a focus on product cost. Maybe next go around.

 

Dan Otter

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Actually the investment choices have gotten far worse. At least previous there were good low cost options like Vanguard or Fidelity mixed in with all the high fee junk. Now it is just high cost options

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