New IRS retirement plan regulations
Filed Under: 403b, IRS, retirement
This week, WELS Human Resources will be sending an e-mail to all WELS congregations and entities outlining a synodwide solution for complying with new IRS regulations, effective Jan. 1, 2009, that are directed at 403(b) retirement savings accounts for non-profit organizations.
Up to this point, called workers and employees of WELS organizations have been able to maintain self-directed 403(b) accounts, and local treasurers or payroll personnel have taken the pre-tax deductions from the employee's pay and forwarded the monies to their 403(b) provider. Now the IRS regulations require more oversight and accountability on the part of the employer (local churches, area Lutheran high schools, etc.) in the administration of a "plan" that assures their employees are in compliance with annual limits, post age-50 make ups, and regulations pertaining to loans and withdrawals.
Under the so-called "Shepherd Plan Solution," WELS organizations will have the opportunity to work with a designated third-party administrator to develop their plans, have an investment platform for all their eligible workers, and access to certified financial planners if needed.
One reason for going to a synodwide program is to eliminate plan development and ongoing compliance costs to WELS member organizations. Pooling resources also reduces investment costs for all WELS employees and called workers as they save for their retirement years. Congregations have the option of going into the program or setting up their own 403(b) plans for their called workers, but plans operated outside of the Shepherd Plan Solution will likely incur development and some ongoing maintenance costs.
View the content of the e-mail in advance, online at: www.wels.net/jump/403b
