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Aug 2008
13
August 13, 2008

Last Call: 403(b) Changes Due Soon

To paraphrase a Frank Sinatra song, the days grow short and soon it will be the autumn of the year. The new final regulations applicable to 403(b) plans are generally effective for taxable years of the plan sponsor beginning after December 31, 2008.

The requirement that the program must be maintained pursuant to a written plan is immediately effective on January 1, 2009.

That means that the hard deadline for a compliant written plan is December 31, 2008.

For detailed highlights of the final regulations, see "Time for a Change: 403(b) Regulations Finally Arrive" in the Fall 2007 Warner Norcross & Judd HR Alert, which may be accessed at http://www.wnj.com/hr_alert_fall_2007/.

There are many new changes in the rules and many new operational requirements that will impact the plan documents. For 403(b) plans that are not maintained in writing, entirely new documentation is required. Even for the plans maintained pursuant to a written program, most will find it necessary to do all new documentation.

It takes a significant amount of time to understand the alternatives in the new rules and to make the appropriate choices for the plan. Even if some documentation is supplied by vendors, it should be reviewed by counsel for compliance and consistency.
 

For our clients who have not already done so and for any other 403(b) plan sponsor who may wish to do so, we urge that you contact your Warner attorney or a member of our Employee Benefits and Executive Compensation Group now. Again, the days grow short.
 

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