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IRS Updates Publication on 403(b)s

The IRS Employee Plans Division’s Tax-Exempt and Government Entities office has updated its Publication 4483: 403(B) Tax-Sheltered Annuities for Sponsors.

The new edition says that the IRS commonly finds mistakes in 403(b)s in the following areas:

  • written plan requirements;

  • employer eligibility;

  • implementation of the universal availability requirement;

  • depositing elective deferrals;

  • excess elective deferrals;

  • employer and employee contributions;

  • loans;

  • hardship distributions;

  • post-severance contributions; and

  • in-service exchanges and transfers.

The publication contains a reminder that following the rules for plan operation can maximize participants’ retirement benefits, keep it in compliance with the law, head off the imposition of penalties and additional taxes, and ultimately keep its qualified status intact. If a plan has made a mistake, Publication 4483 reiterates, it should act to correct them in a timely way and can correct most through IRS correction programs.

The updated publication also provides an enumeration of, and links to, additional publications relevant to 403(b)s, retirement plans and corrections.