Written Plan Document:
All
403(b) plans must have
a written document governing the plan. The document must contain
provisions regarding eligibility, benefits, contribution
limitations,
investment vehicles, time and form of distributions, hardships, loans,
rollovers and transfers.
Universal Availability:
An organization sponsoring
a
403(b) must give all employees the opportunity to make elective
deferrals if any
employee is allowed.
The sponsor may
require a
minimum contribution of $200 and may exclude certain employees
(participants
in other plans of the employer, non-resident aliens,
work-study students, and part-time
employees working less than 20
hours per week). Unlike 401(k) plans, the sponsor is not allowed to
impose minimum age and
service requirements for making salary deferrals to the plan.
Nondiscrimination Testing: 403(b) plans are not subject to the ADP (Average Deferral Percentage) test
for employee salary deferrals (401(k) plans must pass this test).
However, 403(b) plans (other than governmental or church plans) must perform
the ACP (Actual Contribution Percentage) test for employer matching contributions.
Contract Exchanges and Plan-to-Plan Transfers:
A plan document may allow for contract changes (inter-fund transfers within the plan).
Plan-to-plan transfers are allowed
if the participant is a current or former employee of the employer sponsoring the
receiving plan and if both plans allow for the transfer.
Form 5500:
The new regulations expand the reporting requirements for
403(b) plans covered by ERISA.
The new rules will make 403(b) plan reporting requirements
the same as for 401(k) plans.