The 403(b) plan is a retirement plan for employees who work for tax-exempt organizations. But only recently did the IRS develop a program specifically catering to 403(b) plan sponsors—which could potentially improve the way your nonprofit distributes employee retirement benefits.
This new program allows 403(b) plan sponsors to apply for opinion and advisory letters that could help them more readily determine whether a plan meets regulations at their agency.
Employers offering 403(b) plans need to determine whether a pre-approved plan is right for them. Adopting a pre-approved plan can give eligible employers a simpler, more feasible way to provide retirement benefits to their employees” –Sandy P. Purdy, CPA, Lindquist Solutions
Here’s how the application process works:
- As a plan sponsor, you must submit a separate “Application for Approval of 403(b) Pre-approved Plan” for each adoption agreement
- The IRS put together an information package to help plan sponsors draft their 403(b) plan documents with efficiency and accuracy—providing examples of language and plan provisions
- You must submit the application for opinion and advisory letters to the IRS by April 30th, 2015.
To learn more about the 403(b) pre-approved plan program, read the full Lindquist article here.