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Be prepared and get ready now
You will need to comply with the provisions of the final 403(b) regulations effective January 1, 2009 (special transition rules do apply to plans subject to collective bargaining, governmental plans and church plans). Here are some steps you can take to get your program ready – in plenty of time for the compliance date the IRS has established!
Review your current 403(b) materials. Now that the final regulations have been released, you can work with your legal counsel to determine the materials that must to be updated to ensure that they are in line with the requirements of the final regulations. Items to review include:
- Employee handbooks and communications
- 403(b) contracts
- Administrative procedures
- Services agreements
- Collective bargaining agreements
Review the hours worked by your part-time employees and substitute teachers. If they have worked at least 1,000 hours in the past year, remind them that they too can participate in the 403(b) program. And if your new hires are expected to work at least 1,000 hours in the next 12 months, they can also join the 403(b) program.
Know where contributions are being sent. Remember that no new life insurance polices can be issued to participants in a 403(b) program after February 14, 2005.
Review your 403(b) program's administrative procedures. Identify those areas (such as eligibility, hardships, transfers, loans, and qualified domestic relations orders) which may need to adapt to the new IRS rules. The IRS will no longer allow the transaction to be based solely on a participant’s
sign off.
Your ING local representatives can assist you in understanding the IRS' final 403(b) Regulations, and why all of the above items are things you should look at now!
You can also Contact us to request that an ING representative get in touch with you to provide you with more information about the regulations.
These materials are not intended to be used to avoid tax penalties, and were prepared to support the promotion or marketing of the matter addressed in this document. The taxpayer should seek advice from an independent tax advisor.
Insurance products, annuities, and retirement plan funding options issued by (third party administrative services may also be provided by) ING Life Insurance and Annuity Company, One Orange Way, Windsor, CT 06095-4774. Annuities issued by ReliaStar Life Insurance Company, 20 Washington Avenue South, Minneapolis, MN 55401. Securities offered through ING Financial Advisers, LLC (member SIPC), and other broker-dealers with which it has selling agreements. These companies are members of the ING family of companies. Insurance obligations are the responsibility of each individual company. Products and services may not be available in all states.
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