New Code section 403(b) regulations were finalized by the IRS in late July 2007. As promised by the IRS, the regulations are generally not applicable until January 1, 2009. The final regulations contain the provisions that have been discussed in GuideStone’s Staying Ahead of the Curve series, such as requiring a written plan, requiring compliance with the terms of the plan, requiring timely remittance of contributions to the plan provider and eliminating Revenue Ruling 89-23. Additionally, among other items, the final regulations include a tightening of the rules related to what were formerly known as 90-24 transfers, new rules requiring tight coordination between vendors when an employer has multiple 403(b) vendors and new restrictions on in-service distributions of employer contributions made to a 403(b) plan.

Please be aware that during 2008, plan sponsors may need to amend certain provisions of their 403(b)(9) Retirement Plan in order to bring their plan into compliance with the final regulations. Since the issuance of the proposed Code section 403(b) regulations in 2004, GuideStone has worked to change the 403(b)(9) Retirement Plan to make it easier to bring the plan into compliance with the final regulations. We will contact you in advance of any necessary changes to assist you in understanding and making any needed changes to your plan.

GuideStone is committed to helping our clients respond to the final regulations. We are working to review and analyze the new regulations and will provide more details in upcoming editions of re:source. As you are aware, GuideStone is not in a position to provide legal or tax advice.  But please be assured that GuideStone will work closely with your organization to implement these new regulations.

Until more information is released from GuideStone, please feel free to contact your relationship manager or email us for additional details regarding the final Code section 403(b) regulations.