IRS extends deadline on plans for 403(b) plans

The Internal Revenue Service (IRS) has issued a notice granting public schools and tax-exempt organizations an extension on time to complete written plans governing their 403(b) employee retirement plans. The IRS is extending the deadline for plan sponsors to adopt new written plans or amend existing plans to satisfy the requirement of the final 403(b) regulations because of difficulties expressed by numerous plan administrators in meeting the current deadline of January 1, 2009. The extension will give plan sponsors additional time to put their plan documents in place. The IRS will treat these plans as meeting the requirements of 403(b) and the regulations during the 2009 calendar year if: (1) by December 31, 2009, the plan sponsor of the plan has adopted a written 403(b) plan that is intended to satisfy the requirements of 403(b) and the regulations; (2) during 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations; and (3) by the end of 2009, the plan sponsor makes its best effort to correct retroactively any operational failure during the 2009 calendar year to conform to the written plan. The IRS also announced that it will publish a request for comments on a draft revenue procedure on obtaining its approval of prototype 403(b) plans for employers to adopt and on sample plan language for drafting prototype plans and that, after this prototype program is established, it will establish a determination letter program for individually designed 403(b) plans. Background and resources for school districts on the requirements for 403(b) plans are available at the third link below. The fourth link is to another resource, a newly published, 40-page guide for school attorneys available for a download fee.

IRS press release
IRS Notice 2009-3
NSBA School Law pages on school district 403(b) plans
COSA eDocs Store resource on 403(b) plans in school districts, By Forrest Jack Lance, David Hatter et al.