Terminating 403(b) Plans: IRS Rules, Fiduciary Liability, Distribution of Assets, Required Notices to Participants

Note: CPE credit is not offered on this program

A live 90-minute premium CLE video webinar with interactive Q&A


Wednesday, June 23, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, May 28, 2021

or call 1-800-926-7926

This CLE webinar will guide ERISA counsel and fiduciaries on the complex rules and pitfalls to avoid terminating a 403(b) plan. The panel will discuss ERISA rules and requirements for plan terminations, recent IRS Revenue Ruling 2020-23 and Notice 2020-80, distributions upon termination, annuity and consent rules, and other critical items.

Description

Employers who maintain a 403(b) plan may decide to terminate their 403(b) plan. However, superior knowledge of ERISA and IRS rules is required to terminate the 403(b) plans formally. Failure to do so will continue to subject employer plan sponsors to maintaining plan document compliance and the filing of reports and notices with the government and participants.

Generally, 403(b) plans are available to public schools, cities, townships, tax-exempt organizations, or churches. These employers must invest plan assets in annuities, mutual funds, and retirement income accounts. Formal termination includes corporate action to terminate the plan followed by distributing the plan assets according to Treas. Reg. Sec 1.403(b)-10(a)) as soon as possible. However, individual or group annuity contracts or individual or group custodial accounts, described in Code Section 403(b)(7), fund the accounts, complicating distributions and terminations.

Rev. Rul. 2011-7 provided guidance on annuity contracts distributions, holding that they can be deemed to be distributed by delivery to participants or beneficiaries of an individual annuity contract or under a group annuity contract. Recently, the IRS issued Rev. Rul. 2020-23 and related Notice 2020-80 distribution procedures for custodial accounts maintained under Code Section 403(b)(7).

Listen as our panel discusses the rules and requirements for 403(b) plan terminations, recent IRS Rev. Rul. 2020-23 and Notice 2020-80, distributions upon termination, annuity and consent rules, and other critical items.

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Outline

  1. Legal implications and risk when terminating 403(b) plans
  2. Recent IRS guidance
    1. Rev. Rul. 2020-23
    2. IRS Notice 2020-80
  3. Annuity and consent rules
  4. Distributions upon the termination of 403(b) plan
  5. Administrative pitfalls and liability

Benefits

The panel will review these and other key issues:

  • What are the legal implications and other risks when terminating 403(b) plans?
  • What are the key provisions of IRS Notice 2020-80 and Rev. Rul. 2020-23?
  • What are the annuity and consent rules and potential challenges?
  • How can you ensure compliance and avoid administrative issues for distributions upon 403(b) plan termination?
  • What are the other administrative challenges to avoid potential liability?

Faculty

Levine, David
David Levine

Principal
Groom Law Group

Mr. Levine advises plan sponsors, advisors, and other service providers on a wide range of employee benefits matters,...  |  Read More

Additional faculty
to be announced.
Attend on June 23

Early Discount (through 05/28/21)

Cannot Attend June 23?

Early Discount (through 05/28/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include program handouts.

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