Third in an Executive Series on the New 403(b) Regulations (Who It Involves)

 

We see that there is a whole new world ahead revolving around these themes: (see our prior message that describes these themes)

  1. Accountability 
  2. Reportability 
  3. Oversight 
  4. Availability 
  5. Communication

Now we will focus on how you must be involved:

The items listed above play themselves out in some fairly clear areas. Let's detail those for you as we put meat on the bones of our "whole new world" for retirement plans.

You must be involved in:

  • Plan document: This becomes a requirement. Here the IRS is looking for clarity about your plan, confirmation that you know what is to be administered, and transparency in communication to participants and ministry leadership. 
  • Vendor selection: This can no longer be a passive activity allowing participants to direct contributions to vendors or investment groups with which you have no reportable relationship. You will be looking for a centralizing support organization that can provide multiple investment options while administering the plan design on your behalf. 
  • Plan oversight: Demonstrating that you receive regular reports either generated internally or on your behalf for review and oversight of plan features and benefits. Loans, hardship distributions, regular contact, universal eligibility are some of the areas of oversight. 
  • Access to information: Your relationships with a vendor(s) is of such a nature that you have access to information about how your plan is really functioning. 
    • Loans 
    • Hardship distributions 
    • Asset mix 
    • Universal Availability: Is everyone eligible and do they know it?

One note about asset mix: Having available a mix of investment offerings reviewed by you so that a reasonable person can create a blending of investment class investments to serve the needs of your diverse staff. Best practice suggests the creation of an Investment Policy Statement and having individual investment counsel available for your staff. (Note: this is one of Envoy's service strengths.)


So now it is time for you to do a little review of your retirement plan. Stay tuned for our next message where you will find a "retirement plan checklist" for your use.

Blessings as we enter a whole new world together,

Envoy Financial
Trusted Advice Along The Way