Employee Plans Compliance Unit (EPCU) - 403(b) Universal Availability
School districts are being contacted to determine if they are in compliance with the nondiscrimination provisions of IRC section 403(b)(12)(A)(ii), also known as the “ universal availability” requirement. A questionnaire is included with the compliance contact letter to identify if their employees are provided the opportunity to participate in the public school’s 403(b) plan. Refer to the News Release for more details on the project.
The Project Process
The EPCU will eventually contact public schools in every state. The responses from schools are evaluated as to whether the universal availability requirement may not be satisfied. A significant number of cases appear to fall into this category and are sent a letter explaining the law in further detail. This letter is designed to assist them in determining whether or not they actually meet these nondiscrimination provisions. After this additional scrutiny, those schools believing they have not satisfied the requirements must make a fully vested contribution for each otherwise eligible employee, for each year the employee was improperly excluded from participating in the 403(b) plan. The districts have the choice between two available correction methods to calculate the additional contribution.
If You Receive a Letter
Please provide the information requested by the questionnaire. You may also furnish any other documents or clarifying material that you believe will be helpful for us to review. You should make every effort to answer the questionnaire as accurately as possible. Possible defects need to be discovered now when sanction relief is available to public schools making the appropriate corrections timely. Failure to provide this information could result in further action or examination of your plan.
Common questions and answers about the 403(b) Universal Availability Project.
If You Have Questions
Please feel free to e-mail us and we will be glad to answer any questions you have about the project and how it relates to your situation.
- Form 2848 (Instructions), Power of Attorney and Declaration of Representative
- EPCU Universal Availability Closing Letter
- ADP Explanation for Public Schools with 403(b) Plans
- Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans) For Employees of Public Schools and Certain Tax-Exempt Organizations
- Publication 4546, 403(b) Plan Checklist
- News Discussing the 403(b) Universal Availability Project