When a Plan is not a Plan

January 1, 2009 12:24 PM

Does anyone have a clear understanding of changes to 403b investment rules that become effective today?

My wife is in a tizzy as her investments appear to be in chaos. Starting today, new IRS rules take effect that change all 403b plans. My wife has to choose a new plan administrator and new funds. Nobody is able to tell her why this has taken place.

Are there any mefites with a clear understanding of this situation or links to a clear explanation of the why of these changes? If you are affected, what are you doing?

posted by Xurando to work & money (2 comments total)

I have a Fidelity-administed 403(b) plan which has not even seen fit to make an announcement about these changes, so I don't think they are very significant.

As near as I can tell from reading the links here, the changes have to do with how the IRS requires documentation of compliance with already-in-place 403(b) regulations. The IRS has required more stringent documentation and disclosure, including "written plans" about how the money is administered.

It appears to me that some plan administrators may choose to give up on administering 403(b) plans rather than make the effort to comply with the apparently-more-stringent regulations about documentation and disclosure of compliance.
posted by ikkyu2 at 12:39 PM on January 1

The single best source of information I've found on the 403(b) regulations changes and how they are affecting plan participants are the 403(b)wise forums. Also, a synopsis of the changes is here.

My sympathies for your wife - my husband's 403(b) plan administrator also decided to stop administering 403(b) plans due to the new regulations, so now the small non-profit he is working for is scrambling to find a replacement (they didn't stay on top of the whole situation earlier in the year, so...).
posted by Wavelet at 5:12 PM on January 1