The IRS has recently updated its list of pre-approved retirement plans that have received an IRS favorable opinion or advisory letter. This means that the IRS has determined that the plan satisfies the requirements of the Internal Revenue Code Section 403(b).Only certain tax-exempt employers are eligible to sponsor an Internal Revenue Code Section 403(b). Among those employers which may sponsor such a plan are:
- Tax-exempt organizations established under IRC 501(c)(3)
- Public school systems
- Certain ministers:
- Employed by a 501(c)(3) organization
- Ministers not employed by a 501(c)(3) organization. but functioning as a minister in their dai8ly responsibilities with their employer.
Choosing a pre-approved plan, may be beneficial to eligible employers over individually designed plans by costing less, knowing that it meets legal requirements and will make necessary updates for you.
Additional resources and information:
- Why eligible employers may want to adopt a 403(b) pre-approved plan
- Maintaining eligibility to sponsor a 403(b)
- Retirement plans FAQs regarding 403(b) tax-sheltered annuity plans
- Tax-exempt & government entities division at-a-glance
- StayExempt – an IRS site created especially for 501(c)(3) organizations
- Correcting, Finding, Fixing & Avoiding plan errors