It’s the time of year when Santa — and those who work with 403(b) plans — are making their end-of-year lists — and checking them twice.
To that end, the lawyers at Snell & Wilmer have prepared the following end-of-year “to do” list for 403(b) plans.
Adopt Design Changes by the End of the Plan Year. If an employer made any design changes to the plan during the year, it generally must amend its plan to reflect those design changes by the last day of the 2015 plan year (i.e., Dec. 31, 2015 for calendar year plans).
Update Summary Plan Description if Needed. SPDs must be updated once every five years if the plan has been amended during the five-year period and once every 10 years for other plans. If a Section 403(b) plan is subject to ERISA, the SPD may need to be updated, Snell & Wilmer note.
Provide Safe Harbor Notice by Dec. 2, 2015 for Calendar Year Plans. As a reminder, if a Section 403(b) plan uses an ACP contribution safe harbor, an employer must provide the safe harbor notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Annual Automatic Enrollment Notice by Dec. 2, 2015 for Calendar Year Plans. If a Section 403(b) plan is subject to ERISA and has automatic deferrals, an employer must give an annual automatic enrollment notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Annual Qualified Default Investment Alternative (QDIA) Notice by Dec. 2, 2015 for Calendar Year Plans. If a Section 403(b) plan is subject to ERISA and an employer is relying on the QDIA safe harbor, it must give an annual notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Participant Benefit Statements. Section 403(b) plans that are subject to ERISA must provide individual benefit statements at least annually, although plans that permit participants to direct the investment of their accounts must provide the statement at least quarterly. Plans must also provide the statement upon request.
Distribute Summary Annual Report. Section 403(b) plans that are subject to ERISA must distribute a summary annual report, which is a summary of the information reported on the Form 5500. The summary annual report generally is due nine months after the plan year ends. If the Form 5500 was filed under an extension, the summary annual report must be distributed within two months following the date on which the Form 5500 was due.
If Adding an ACP Contribution Safe Harbor for 2016, Adopt Amendment Before the 2016 Plan Year. ACP contribution safe harbors may not be adopted mid-year. Accordingly, if an employer wishes to add an ACP contribution safe harbor to its Section 403(b) plan for the 2016 plan year, it must adopt an amendment by Dec. 31, 2015 for calendar year plans.
Comply with Form 5500 Reporting Requirements. Snell & Wilmer remind that, effective for plan years beginning on or after Jan. 1, 2009, Section 403(b) plans subject to ERISA must comply with standard Form 5500 filing requirements, including an annual plan audit for large plans (i.e., plans with 100 or more participants) and detailed financial information for small Section 403(b) plans (i.e., plans with fewer than 100 participants).
To that end, the lawyers at Snell & Wilmer have prepared the following end-of-year “to do” list for 403(b) plans.
Adopt Design Changes by the End of the Plan Year. If an employer made any design changes to the plan during the year, it generally must amend its plan to reflect those design changes by the last day of the 2015 plan year (i.e., Dec. 31, 2015 for calendar year plans).
Update Summary Plan Description if Needed. SPDs must be updated once every five years if the plan has been amended during the five-year period and once every 10 years for other plans. If a Section 403(b) plan is subject to ERISA, the SPD may need to be updated, Snell & Wilmer note.
Provide Safe Harbor Notice by Dec. 2, 2015 for Calendar Year Plans. As a reminder, if a Section 403(b) plan uses an ACP contribution safe harbor, an employer must provide the safe harbor notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Annual Automatic Enrollment Notice by Dec. 2, 2015 for Calendar Year Plans. If a Section 403(b) plan is subject to ERISA and has automatic deferrals, an employer must give an annual automatic enrollment notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Annual Qualified Default Investment Alternative (QDIA) Notice by Dec. 2, 2015 for Calendar Year Plans. If a Section 403(b) plan is subject to ERISA and an employer is relying on the QDIA safe harbor, it must give an annual notice at least 30 days, but not more than 90 days, before the beginning of each plan year (i.e., Dec. 2, 2015 for calendar year plans).
Provide Participant Benefit Statements. Section 403(b) plans that are subject to ERISA must provide individual benefit statements at least annually, although plans that permit participants to direct the investment of their accounts must provide the statement at least quarterly. Plans must also provide the statement upon request.
Distribute Summary Annual Report. Section 403(b) plans that are subject to ERISA must distribute a summary annual report, which is a summary of the information reported on the Form 5500. The summary annual report generally is due nine months after the plan year ends. If the Form 5500 was filed under an extension, the summary annual report must be distributed within two months following the date on which the Form 5500 was due.
If Adding an ACP Contribution Safe Harbor for 2016, Adopt Amendment Before the 2016 Plan Year. ACP contribution safe harbors may not be adopted mid-year. Accordingly, if an employer wishes to add an ACP contribution safe harbor to its Section 403(b) plan for the 2016 plan year, it must adopt an amendment by Dec. 31, 2015 for calendar year plans.
Comply with Form 5500 Reporting Requirements. Snell & Wilmer remind that, effective for plan years beginning on or after Jan. 1, 2009, Section 403(b) plans subject to ERISA must comply with standard Form 5500 filing requirements, including an annual plan audit for large plans (i.e., plans with 100 or more participants) and detailed financial information for small Section 403(b) plans (i.e., plans with fewer than 100 participants).
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