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403(b) Regulations Information Sharing Agreement Requirements

Participants, employers and plan providers have more steps to complete if your organization makes contributions to more than one investment provider or allows plan participants to move money from one 403(b) investment provider to another while in-service. (These new rules do not apply to rollovers between retirement plans.)

Money can still be moved, but there is now a new wrinkle. To perform a contract exchange, the employer and the provider receiving the 403(b) money must enter into an agreement to exchange required information related to compliance with the 403(b) requirements. An exchange will no longer be allowed between providers with which an employer has no formal relationship.

plan-to-plan transfer occurs between two unrelated employers’ 403(b) plans. For example, a participant may elect to transfer money from a former employer's 403(b) plan into his/her new employer’s 403(b) plan. 

Activity    Information Sharing Requirement
Contributions to more than one provider Employer must ensure coordination of information between vendors
Investment exchange     Employer must ensure coordination of information between vendors
Contract exchange         Written Information Sharing Agreement required
Plan-to-plan transfer       Information sharing not required
Rollover     Not affected by new 403(b) regulations

Your decisions may present some new accountabilities and challenges. You may need to:

  • Establish an Information Sharing Agreement documenting responsibility for sharing information if you allow plan participants to move money within your single 403(b) plan from one investment provider (with a payroll slot) to a vendor (who does not occupy a payroll slot).
  • Provide written consent when participants request certain types of plan distributions, such as a hardship withdrawal or plan loan.

The IRS will release additional clarification to help employers and providers with the operational aspects of this change. Again, plans that use GuideStone as their sole provider will see minimal impact from this new regulation.

GuideStone Financial Resources has been dedicated to enhancing the financial security of our plan participants for 90 years. Our employees are highly experienced with church retirement plans and stand ready to help you. Please email us or call 1-888-98-GUIDE (1-888-984-8433) for additional information.

This information should not be considered tax or legal advice. GuideStone stands ready to assist your organization as you work with your legal and tax advisers by providing resource information that you and your adviser may find beneficial.