ING--Working with the District

You may have heard about new “403(b) Regulations”.  For the first time in more than 40 years the Internal Revenue Service (IRS) has issued new regulations governing how 403(b) retirement programs need to operate.  Most of the changes focus on plan administration issues that you, as a 403(b) plan participant will most likely not encounter.  There are a few changes, however, that will affect you.

By January 1, 2009, the new 403(b) Regulations will require your employer to:

• Share certain information with approved Investment Providers
• Have a written plan document laying out your program’s 403(b) rules
• Send annual notification to all eligible employees reminding them of availability of the 403(b) plan
• Monitor IRS annual contribution limits
• Remit contributions “readily”
• Review and authorize disbursement requests by plan participants (such as loans, hardship withdrawals, and any other distribution requests, as well as contract exchanges – formerly known as 90-24 transfers)

It is this last item which may have the most impact on you as a 403(b) plan participant.

 

The regulations require that your plan sponsor review all distribution requests to ensure that they meet both the IRS regulatory criteria and the terms of the 403(b) plan before your investment provider can disburse your funds. 

 

A change in the treatment of contract exchanges has actually already taken place. Effective September 25, 2007 the IRS required that your plan sponsor enter into and “information sharing agreement” with all providers receiving any transfer of funds under the 403(b) plan.  Transfers under the plan can only be made between the providers who have an

information sharing agreement in place and are included in a listing of approved providers under the 403(b) plan document. 

Because of the complexity of the new regulations WJUSD has chosen ING as our Third Party Administrator to carry out most of the day-to-day duties.

ING will provide these services at no charge to the District or to the employees. 

The District is currently working with ING to prepare our written plan.  ING has sent requests to sign information sharing agreements to all vendors currently on our approved provider list.  No vendors will be eliminated from the approved provider list unless they refuse to sign the information sharing agreement.

There will be informational meetings held for District employees in the month of October.  There will also be information mailed to your home regarding the changes.  The first meeting is scheduled for October 22 in the Board Room from 2:00 – 6:00 p.m.  A second meeting will be scheduled for those who cannot attend the first meeting.