PLANSPONSOR - August/September 2018 - 20

Upfront
403(b) Plan Remedial Amendment Period
THE last day of the 403(b) plan remedial
amendment period is not far off, and both
Employee Retirement Income Security Act
(ERISA)-governed and non-ERISA 403(b)
plan sponsors need to start working on any
plan restatements now.
Grant Halvorsen, vice president,
retirement plan consulting at MRP, says,
when the final regulations became effective
in 2007, they stated that all 403(b) plan
sponsors, excluding certain church plan
sponsors, had to adopt a written plan document
no later than December 31, 2009;
this was a new requirement for non-ERISA
plans. However, the IRS neglected to offer
much guidance about what the document
needed to say or include, he says. " Plan
sponsors made a good faith effort, with
the caveat of really being unsure if their
documents complied with what the IRS
wanted, " Halvorsen says.
In that final
regulation,
the IRS
indicated that the plan document requirement
could be satisfied by following
what is sometimes called the " paperclip "
approach: having one centralized
document plus various others-such as
underlying investment product contracts,
administrative and service agreements,
procedures and, if applicable, state statutes
and regulations-that convey what provisions
have been added.
In April 2013, the agency issued
Revenue Procedure 2013-22 establishing a
preapproved plan program for 403(b)s and
offered a remedial amendment period for
403(b) plan documents. The last day of that
period is March 31, 2020.
What This Period Offers
The remedial amendment period, says
Halvorsen, allows 403(b) plan sponsors
to restate their plans by adopting one of
the IRS' preapproved prototype or volume
submitter plan documents, retroactively
effective January 1, 2010. Plan sponsors
may adopt these plans as restatements in
order to correct any form defects made
in their written plans between January 1,
2010, and the end of the remedial amendment
period.
In other words, says Deborah Grace,
attorney at Dickinson Wright PLLC, the
remedial amendment cycle is a time frame
in which the plan sponsor can go back and
fix its plan document so it reflects how the
plan has been operating.
TALKING POINTS
Retirees Going Back to Work
Fifty-three percent of workers who plan to retire
in the next five years expect to return to work,
according to a survey by Home Instead Inc. To
earn more income was the main reason, cited
by 67%, followed by to fight boredom (44%) and
to keep their minds sharp (22%). Sixty-eight
percent of these pre-retirees plan to switch to
a different industry-65% of " un-retirees " either
plan to or have already switched.
Health Care Disruptors Wanted
" The growth in virtual health care solutions
largely reflects employer frustration with the
pace of change in how care is delivered, "
says Brian Marcotte, president and CEO of the
National Business Group on Health. " Seven in
10 employers believe new market entrants from
outside the health care industry are needed
to disrupt health care in a positive way. These
disruptors include innovators from Silicon
Valley and elsewhere and employer coalitions. "
20 PLANSPONSOR.com August-September 2018
Halvorsen notes that adopting a preapproved
document assures plan sponsors
that their documents are correct in form.
However, if they find they have operational
errors-where the plan has not been
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PLANSPONSOR - August/September 2018

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