Newport Reminds 403(b) Plan Sponsors About End-of-Year Deadline
ORLANDO, Fla. (Business Wire EON/PRWEB ) August 12, 2008 --
The Newport Group,
a national provider of retirement plans, executive benefits
and investment consulting services, is reminding sponsors of 403(b)
plans that they have only until the end of 2008 to comply with 403(b)
regulations issued by the Treasury Department last year.
“Sponsors of 403(b) retirement plans such as
hospitals, schools, universities and other tax-exempt organizations
have a little less than five months to review their plans and make any
necessary changes,” said Chief Marketing
Officer Tom Pittman.
Such employers “face a number of challenges
and opportunities in complying with these new rules,”
added Newport’s Vice President and Chief
Counsel Sam Brkich. “These new regulations
will require all employers who contribute to a 403(b) arrangement
to adopt a formal plan document by December 31, 2008. This
includes employers whose role is limited to administering payroll
deductions.” Brkich noted that sponsors of
these more “passive”
403(b) plans will not become subject to ERISA by adopting a
written plan document.
“What we call ‘active’
sponsors, in other words those actively involved in plan design
and administration and are subject to ERISA, may already have
such a document. These sponsors will still want to review their current
plans for compliance with the 403(b) regulations, since failure to
comply could result in substantial IRS penalties.”
Brkich said that the upcoming document deadline provides an opportunity
for active sponsors to review the plan’s
overall design. “403(b) plans are eligible
for design enhancements authorized under the Pension Protection Act,
such as automatic enrollment and the qualified default investment
alternatives, or QDIA,” he
observed.
Sponsors of ERISA 403(b) plans also should review the plan’s
delegations of fiduciary duties, especially with respect to
investments. According to Brkich, “individuals
responsible for menu selection can be personally liable
for losses if the menu and any outside advisors are not monitored on a
regular basis and adjusted consistent with the ‘prudent
expert’ standard of care.”
Plan fiduciaries are also responsible for monitoring expenses, Brkich
remarked. “403(b) plans subject to ERISA will
be required to comply with the new participant disclosure regulations
issued July 22, 2008. The rules would require disclosure by
November 30, 2008 in order to meet the proposed January 1, 2009
effective date.”
Pittman commented that Newport is a recognized industry expert in each
of these critical aspects of plan design and execution, with
on-staff experts in consulting, legal, communications and plan
administration. A full-service provider of retirement and benefit
plans, Newport has earned industry accolades for its plan sponsor
and participant services. With corporate headquarters in Orlando,
the firm maintains service centers in Charlotte NC, Greensboro NC, La
Crosse WI, Orlando FL, Richmond VA, St. Louis MO, and St. Petersburg FL.
About The Newport Group
Founded in 1984, The Newport Group is a leading retirement services and
asset management firm—specializing in the
creative design, funding, and administration of qualified and
non-qualified retirement plans as well as co-fiduciary investment
consulting services. Through its innovative and customized solutions,
Newport is uniquely positioned to satisfy the distinct financial needs
of employers and employees, and has done so for hundreds of the country’s
largest and best-known companies. For more information, visit www.newportgroup.com.
Keyword Tags: The Newport Group, 401(k), retirement plans,
deferred compensation, executive benefits, non-qualified plans,
record-keeping, defined contribution plans, 403b, investment consulting
See the original story at: http://eon.businesswire.com/releases/newport/sponsors/prweb1205094.htm
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