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Jamie WewetzerClient Relations Manager, ING

The Final 403(b) Regulations Are Here…

For use with Plan Sponsors only.

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Important Information

These materials are not intended to be used to avoid tax penalties, and were prepared to support the matter addressed in this presentation. The taxpayer should seek advice from an independent tax advisor.

IRS Circular 230 Disclosure: Any tax advice contained in this document (including any attachments) was not intended by the author of this document to be used, and cannot be used by the audience or any other person, for the purpose of avoiding any Internal Revenue Code penalties that may be imposed on such person. Any tax advice contained in this document was not intended by the author of this document to be used or referred to, and cannot be used or referred to, in promoting, marketing, or recommending the transaction(s) or matter(s) addressed herein.

The discussion highlights key issues of the final Internal Revenue Code regulations. The information is provided for your education only. Neither ING or its affiliated companies or representatives offer legal or tax advice. Consult your tax and legal advisors regarding your individual situation. C09-0210-009 (2/09)3012600.B.S

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The Final 403(b) Regulations

For the first time in over 40 years, the Internal Revenue Service has released new regulations for 403(b) plans.

Why?

• More employer oversight

• Avoid abuse of pre-tax/tax deferred plans

• To preserve the tax qualified nature of the plans

• More like other employer sponsored retirement plans

IRS

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How Do the 403(b) Regulations Affect Your Plan?

By January 1, 2009, plan sponsors will be required to do much more, including :

Share information with approved Investment Providers

Oversee and authorize disbursement requests by plan participants (loans, transfers, withdrawals, etc.)

Make sure that all eligible employees know about the 403(b) plan, including providing annual notice to all eligible employees

Monitor IRS annual contribution limits Remit contributions on a timely basis

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How Will the 403(b) Regulations Affect Employers?

A Written Plan Document must be adopted

Old RulesPlan could operate without a formal plan document

New RulesThe plan sponsor must adopt a written plan document

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IRS Extension: New Due Date for Establishing Your Written Plan

Employer’s 403(b) plan:

• Must be written

• Must contain the “rules of the road”

• Due date: by 12/31/09

• Plan in operation should comply with IRS regulations throughout 2009

• Plan operation must match the plan document provisions

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How Will the 403(b) Regulations Affect Employers?

Restrictions on changing investments among 403(b) providers

Old RulesIf permitted: participant directs transfer to any 403(b) provider

New RulesIf permitted by plan document: participant can move among only providers identified under the 403(b) plan

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How Will the 403(b) Regulations Affect Employers?

Authorization needed for participant requests for a hardship, loan or other distribution

Old RulesParticipants were able to “self-certify” withdrawal requests

New RulesDisbursement requests must be reviewed and authorized by:• Employer, or• Service provider appointed by the employer

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How Will the 403(b) Regulations Affect Employers?

Annual Notice About the 403(b) Plan to All Eligible Employees

Old RulesNo IRS requirement for plan sponsor to notify employees of their eligibility to participate in the 403(b) program

New RulesEmployer must:• Notify eligible employees about participating in the 403(b) Plan; and • Remember that a broader range of employees are now considered eligible to participate in the 403(b) plan

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How Will the 403(b) Regulations Affect Employers?

Remit contributions “readily”

Old RulesNo IRS rule on the timing of contribution remittance

New Rules

No specific date, but within a period that is “not longer than reasonable”

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Things to Remember…

The IRS 403(b) rules provide for a new “normal” for your plan

• New IRS Rules to be met

• Plan document to use as road map More employer oversight of the 403(b) plan

• Plan sponsor role to authorize transactions under the 403(b) plan

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Get By With A Little Help …Go To www.ing.com/us/403bregs

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Questions?