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Sample Annual Effective Opportunity Notice

Instructions

You may modify this sample and develop your own annual notice to inform eligible employees 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. Before sending out the annual notice, you will need to know:

  • Which employees are excluded from making salary reduction contributions (including Roth contributions if permitted).
  • If your plan offers Roth contributions.
  • The frequency with which your plan allows eligible employees to make changes to salary reduction contributions.


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.

Eligible employees are permitted to submit Retirement Contribution 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 Retirement Contribution 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>.
  • Retirement Contribution 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 $19,500 (in 2020, as indexed) to all elective deferral plans in which you participate. Additionally, the plan permits eligible employees age 50 or older to make catch-up contributions of up to $6,500 in the current tax year.

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.


Let time work for you.

Enrolling today gives you the best chance to meet your retirement income goals. The earlier you enroll, the more you can save.

Based on a monthly investment of $250 and an 8% annual average rate of return. This is a hypothetical example that illustrates the future value of regular monthly investments for different time periods. It is presented for illustrative purposes only and does not reflect actual performance or predict future results of any particular account or investment.