IRS CHANGES COMPLIANCE REQUIREMENTS FOR 403B PLANS

Retirement plans sponsored by not-for-profit organizations under the Internal Revenue Code section 403(b) have historically proved to be easy to administer and have allowed an opportunity for significant savings for covered employees. During 2007, the Internal Revenue Service (IRS) issued final regulations under section 403(b), these regulations replace the original regulations issued in 1964. The final regulations for 403(b) plans are similar to those already in existence for 401(k) plans. Trustees and plan administrators for 403(b) plans should familiarize themselves with the new requirements to ensure continued IRS compliance.

Starting in 2009, 403(b) plans will be subject to expanded filing requirements for IRS Form 5500 Annual Return/Report of Employee Benefit Plan. In addition, ERISA-covered plans with more than 100 participants will be required to file audited plan statements with their 2009 Form 5500 filing. The Department of Labor (DOL) estimates that approximately 7,000 403(b) plans will be subject to the new requirements.

More information on the new DOL regulations, published in the November 16, 2007, Federal Register, can viewed at www.dol.gov/ebsa/regs/fedreg/final/20071116.pdf. If an organization's plan covers more than 100 participants, preparations for the new requirements should start now. Some suggested steps include:

• Organizing plan documents and ensuring they have been updated as required by IRS regulations
• Obtaining copies of all plan asset records for all participant accounts
• Discussing the scope and additional information that will be needed to complete either a full or limited scope employee benefit plan audit with a member of Rubino & McGeehin's audit department

Ms. Hollenhorst may be reached directly at ahollenhorst@rubino.com. For more information about Rubino & McGeehin, please visit www.rubino.com or call 301.564.3636.