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IRC 403(b) Tax-Sheltered Annuity Plans – Operate and Maintain a 403(b) Plan

An eligible employer that has established a 403(b) plan must operate and maintain the plan by taking certain actions to ensure it continues to provide tax-deferred benefits to plan participants.

Follow the terms of the plan

An employer must operate its 403(b) plan according to its written program or the plan may be disqualified. This may lead to the loss of tax-deferred status for all plan contracts.

Deposit employee contributions in a timely manner

You must deposit all contributions to a 403(b) plan account or transfer them to an annuity contract issuer within a period that is not longer than is reasonable for the proper administration of the plan. 403(b) plans governed by ERISA may be subject to more restrictive requirements.

Reporting and participant disclosure

Certain 403(b) plans may be subject to annual Form 5500 filing requirements, and all plans are required to provide information to participants. See Retirement Plan Reporting and Disclosure for a chart of the requirements.

Conduct periodic reviews

The IRS provides checklists and tips to help you conduct periodic reviews of your 403(b) plan. See Have you had your retirement plan check-up this year?

Update the plan document for recent law changes

See Update a Plan. You must amend your plan document periodically to comply with current law. The IRS provides resources to help you keep your plan up-to-date, including sample plan language.

Nondiscrimination testing

The plan administrator may need to conduct annual testing to determine whether the plan complies with required nondiscrimination provisions for eligibility and benefits. This requirement depends on the type of organization sponsoring the plan and/or the type of 403(b) plan.

Additional resources


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Page Last Reviewed or Updated: 21-Nov-2014