It’s time for 403(b) restatements!
By Darin Williamson
Vice President, Institutional Services
VALIC now offers a variety of 403(b) pre-approved volume submitter plans. The volume submitter format allows language customization, which offers flexibility to meet the needs of most 403(b) clients, including both ERISA and non-ERISA sponsors, churches, and governmental entities. With a 403(b) pre-approved document, the employer will receive a favorable IRS letter providing peace of mind the written document is compliant.
Although there is no requirement 403(b) sponsors adopt a pre-approved document, there are several benefits in doing so.
Why adopt a 403(b) pre-approved document?
- Favorable letter. An employer that adopts a 403(b) pre-approved plan generally has assurance the form of the pre-approved plan meets legal requirements. Additionally, the IRS has suspended the determination letter program and will no longer be issuing letters on individually designed plans.
- Cost. Generally, costs associated with pre-approved plans are less than individually designed plans.
- Legislative updates. Pre-approved plans will be amended to remain compliant with any law changes. Those plan sponsors choosing to remain on their current VALIC document will no longer receive ongoing maintenance or plan updates.
- Correction. Employers may adopt a pre-approved 403(b) plan to correct form defects retroactively from January 1, 2010.