Technical Competence

Technical Competence covers the nuts and bolts of the 403(b) plan market, focusing on regulations at both the state and federal level, along with developments in public-employee plan management.


Technical Competence

Technical Competence

By Fred Barstein5/27/2014 • 0 Comments

While assets in IRAs are larger than those in DC plans, the vast majority of their growth comes from rollovers, according to research from EBRI. The EBRI database covers $2.09 trillion of the ICI-estimated $5.6 trillion in IRAs as of the end of 2012 and includes 25.3 million accounts for 19.9 million individuals in 2012. Of the 2.4 million accounts that received contributions, 1.3 million came from rollovers — but those accounts had 10 times the amount of contributions.  READ MORE

By John Iekel5/22/2014 • 0 Comments

Have you made a mistake in administering your 403(b) plan? Does this mistake put you at risk of IRS action? If so, you are not alone — not only in the sense that others have made mistakes, but also because the IRS has updated its 403(b) Plan Fix-It Guide, a resource that tells plan sponsors how to identify errors in 403(b) administration and correct them. Equally important: the IRS also says how to avoid the mistake in the first place.  READ MORE

By John Iekel5/22/2014 • 0 Comments

The IRS took the industry by surprise with the definition of severance of employment (specifically for public school districts) contained in the Listing of Required Modifications (LRMs) posted in March 2013 to provide guidance on the preparation of plan documents for the IRS 403(b) pre-approval program. In this week’s MarketBeat, Ellie Lowder discusses the issues the IRS' new position raises. 


By Fred Barstein5/20/2014 • 0 Comments

In a recent speech in Washington, New Jersey Gov. Chris Christie (R) laid the groundwork for moving more state workers into a blended 401(k)/DB plan to fill a $807 million hole in the state’s $33 billion budget. Currently, the state’s retirement plan is underfunded by an estimated $51 billion, the Wall Street Journal reports. READ MORE

By John Iekel5/15/2014 • 0 Comments

Some states and cities have found that cutting cost-of-living adjustments (COLAs) to the pensions they provide their employees is a way to loosen the financial vise of pension liabilities. The Center for Retirement Research of Boston College in its recent study, “COLA Cuts in State and Local Pensions” discusses this child of the Great Recession and generous pension plans whose context has changed.  READ MORE

By John Iekel5/14/2014 • 0 Comments

Change is coming to the “once each 12 months” rule for indirect IRA-to-IRA rollovers. The federal Tax Court, in Bobrow vs. Commissioner of Internal Revenue Service, held that you can’t make a non-taxable rollover from one IRA to another if you have already made a rollover from any IRA that you own. In MarketBeat, Ellie Lowder discusses the ramifications of the ruling and what you need to do.


By John Iekel5/13/2014 • 0 Comments

Can a 55 year old who retired three years before and who believes that he will not incur an IRS penalty on withdrawals from his 403(b) make them? Ellie Lowder has the answer in this week’s Tech Talk. READ MORE

By John Iekel5/11/2014 • 0 Comments

Can a retiree who has elected a partial lump sum and does not have a 403(b) account but has a 457(b) account establish a 403(b) to receive the rollover from her former employer? Or can she roll over the lump sum distribution to her 457(b)? Ellie Lowder has the answer in this week’s Tech Talk. READ MORE

By John Iekel5/10/2014 • 0 Comments

The IRS is auditing 403(b) plans — especially in light of the changes made to the 403(b) regulations in the last few years. In the latest Market Beat, Kimberly A. Flett points out that with the right amount of planning and proper administration, plan sponsors can avoid audit pitfalls and provide for an employer-sponsored plan that effectively meets IRS guidance and regulations. READ MORE

By John Iekel5/6/2014 • 0 Comments

The funded status of public- and private-sector pension plans is a classic example of bad news/good news. To wit: Some states’ pensions are in bad shape, but funding of public-sector pension plans overall is improving; corporate pensions’ funded status fell in April, but only very slightly.  READ MORE

By John Iekel5/5/2014 • 0 Comments

The IRS has rolled out its next 403(b) Compliance Check questionnaire, focusing on whether an employer whose 501(c)(3) nonprofit status was revoked still offers a 403(b) tax-deferred annuity plan to its employees. READ MORE

By Fred Barstein5/3/2014 • 0 Comments

Reacting to a forensic investigation initiated by state employees, North Carolina’s $87 billion state pension system may be moving from a sole trustee to a board soon. As reported in P&I, a panel convened by State Treasurer Janet Cowell (D) is recommending the change amid allegations set forth in a forensic investigation commissioned by the State Employees’ Association of North Carolina.  READ MORE

By John Iekel5/2/2014 • 0 Comments

If one of your 403(b) participants applies for a loan from her account, but the account was written when the company held a payroll slot with a non-ERISA employer, what do you do? And does it matter if you received contributions to the account after Jan. 1, 2005, but it was deselected by Jan. 1, 2009? READ MORE

By John Iekel4/23/2014 • 0 Comments

A recent GAO report found that while 81,000 new employer-sponsored retirement plans were formed during the 3-year period between 2009 and 2011, the overall trend was negative due to plan terminations — even with increased tax incentives. In addition, new plan formation during that period was below 2003-2007 levels. But the news was not all bad: The number of participants grew. READ MORE

By John Iekel4/22/2014 • 0 Comments

State pension plans face continuing and growing challenges in fulfilling the promises they have made to their employees — to the tune of a collective $915 billion. The Pew Charitable Trust has issued a new report that serves as a wake-up call to state governments, but it does contain a kernel of hope.  READ MORE

By John Iekel4/22/2014 • 0 Comments

The Office of State and Local Finance, the Treasury Department’s newest, is charged with coordinating oversight of state and local financial bond markets, but that’s not all — it also will monitor public pension fund liabilities, Pensions & Investments reports.


By Fred Barstein4/19/2014 • 0 Comments

According to research by ING, plan participants who use TDFs are more confident about meeting their retirement goals. They also defer more and are less stressed. In an online survey of more than 1,000 plans conducted last September by ING, 54 percent of investors who chose TDFs said they are confident about meeting their retirement goals — compared with 41 percent of those who do not use TDFs. READ MORE

By John Iekel4/14/2014 • 0 Comments

It’s now easier for plan sponsors and employers to participate in the 403(b) pre-approved plan program.  April 14 was the effective date of IRS Revenue Procedure (Rev. Proc.) 2014-28. The new guidance modifies guidance the IRS issued last year, Rev. Proc. 2013-22, to make it easier for a person to qualify as a pre-approved 403(b) plan sponsor and as a mass submitter.


By John Iekel4/14/2014 • 0 Comments

New guidance from the IRS may make the plan-to-plan rollover process a little smoother. Revenue Ruling 2014-9, issued on April 3, is intended to make it easier for plan participants to consolidate their retirement savings accounts by making it easier for them to move assets from one employer plan to another.  READ MORE

By Ronald Triche4/12/2014 • 0 Comments

The IRS, in Notice 2014-19 and related FAQs, says clearly that retirement plans — including 403(b) plans — have to recognize same-gender spouses and spells out how. The notice and FAQs, which the IRS issued April 4, are a follow-up on Revenue Ruling (Rev. Rul.) 2013-17, which provided general guidance on the tax implications of the Supreme Court’s decision in U.S. v. Windsor (the DOMA case). READ MORE

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