A L E R T :
Despite IRS Delay in Issuing a Sample Plan, the Deadline for Adopting a Written 403(b) Plan Remains December 31, 2009

The IRS requires that employers with 403(b) plans adopt a written plan document that complies with the tax laws by December 31, 2009. The IRS had said that it would issue a sample plan in 2009 that employers could either adopt or use as a model. However, the IRS has delayed issuing the sample plan, saying it will not be available until 2010. Despite this delay in releasing the sample plan, the deadline for adopting a compliant written plan is still December 31, 2009. The IRS could extend this deadline, but so far has not said it will do so.

Therefore, employers that have not already done so should take steps to adopt a tax-compliant plan document by December 31, 2009. Employers should consult their plan vendor or legal counsel for help on adopting a plan. When the IRS issues the sample plan, employers should evaluate whether more changes are needed to comply with the IRS's preferred language. Additionally, under recent changes in state law, it may be possible for plan participants to pay some of the agency's costs related to administering the 403(b) plan. Such cost shifting may require collective bargaining, depending upon the specific situation. If you have any questions regarding your agency's obligations, please contact us for assistance or to coordinate any necessary referral to tax counsel.