Instructions
You may modify this sample to help develop your own annual notice to give to all of your eligible employees informing them of their opportunity to make deferrals into the 403(b) plan. This notice is provided for convenience only and has not been approved by the IRS. You should review your plan and modify this document to correspond with the terms of your plan. For instance, you will need to know:
- If your plan offers Roth contributions;
- If all employees are excluded from making salary reduction contributions (including Roth contributions if permitted). All part-time and full-time employees are eligible to participate, except those indicated below:
- Employees that will not contribute more than $200 per year;
- Non-resident aliens;
- Employees that normally work less than 20 hours per week or are expected to work less than 1,000 hours in the year hired or for subsequent years worked less than 1,000 hours in the prior year;
- Student employees, described under Code section 3121(b)(10).
Annual Notice of Right to Participate in 403(b) Plan
To: All Employees of <Employer name>
From: <Human Resources Director or Other Business Official>
Date: <Date>
Re: Notice of Your Right to Participate in the 403(b) Retirement Plan of <Employer name>
In compliance with the 403(b) regulations, we are pleased to notify our employees of the availability of a 403(b) plan in which salary reduction contributions
<including Roth contributions> can be made.
Employees are permitted to submit salary reduction agreements to the <payroll / human resources / benefits department>. The requested salary reduction contributions will begin [<at any period / each month/ each quarter> at the first payroll period following receipt of the salary reduction agreement].
The following information is available to aid employees participating in the plan:
- A list of authorized providers can be obtained from the <payroll / human resources / benefits department>, or on our website at <insert URL>.
- Salary reduction agreements can also be obtained from the <payroll / human resources / benefits department>.
Generally, salary reduction contributions can be made in an amount up to the lesser of 100% of your includible compensation or $16,500 (in 2010, as indexed) to all elective deferral plans in which you participate. Additionally, the plan permits the following catch-up contributions to be made by eligible employees:
- Up to $5,500 for employees that are age 50 or older in the current tax year (in 2010, as indexed);
- Up to $3,000* for employees that have worked 15 or more years of church-related service by the end of the current tax year (provided you have not contributed on average $5,000 or more for each prior year of service and provided the additional amounts used under the increased limit have not reached $15,000 or more).
* A calculation should be performed to confirm eligibility.
Please be sure to consult with your legal or tax advisor before participating in the 403(b) plan. The <name of employer> does not provide tax or legal advice.