Determination Letters Will Not be Issued for 403(b) Plans

Valuable Information on 401ks, Pensions, ESOPs, Form 5500 Preparation + More

In April 2013, the IRS issued Revenue Procedure 2013-22 which provided much needed clarification regarding the fate of 403(b) determination letters. Prior to this, it was believed that the IRS would adopt a system of determination letters, similar to those issued for 401(k) plans. Revenue Procedure 2013-22 states that determination letters will not be issued for 403(b) plans. Instead, the IRS has provided pre-approved 403(b) plan samples.

A company can use the sample plan provisions and information package provided on the IRS website to draft or amend its 403(b) plan. In place of a determination letter, the IRS will issue a favorable opinion or advisory letter. However, the favorable opinion or advisory letter will not cover whether the plan satisfies ERISA requirements and other key items.

If you audit or are involved in the administration of a 403(b) plan, please visit the IRS website and ensure that your current plan is in compliance with the mandatory plan provisions.

By Rex Platt, CPA