403(b) Plans: Are you ready for the new Form 5500 Reporting and Audit Requirements?


By Mara Bruce

In November 2007, the Department of Labor (DOL) issued amended regulations eliminating an exemption granted to 403(b) plans from the annual Form 5500 reporting, disclosure and audit requirement under ERISA. The removal of this exemption subjects ERISA-covered 403(b) plans to the same Form 5500 reporting and audit requirements as 401(k) plans, beginning with their 2009 Form 5500 filings. Generally, plans with 100 or more participants will be required to file audited financial statements beginning with their 2009 Form 5500 filing. Those plans with fewer than 100 participants may be eligible to file a short Form 5500 without audited financial statements.

For those of you sponsoring these plans, you are probably wondering, “Where do I start?” There are a number of steps you can take now to make the change as easy as possible:

  • Become familiar with the DOL’s reporting and audit requirements for the 403(b) plans.
  • Make sure the plan has a current, written plan document. This document needs to be in place as of January 1, 2009.
  • Review the plan’s exempt status.
  • Establish internal controls over the recordkeeping of the plan and designate an individual responsible for the reporting responsibilities.
  • Identify all plan service providers and ask if they will be able to provide you with information to complete the plan’s audit and Form 5500.
  • Gather 2008 comparative financial information. If your plan requires an audit, comparative beginning balance information will need to be audited as well. This will include preceding year-end investment valuations, contributions owed to the plan and accrued expenses.
  • And last but not least, ensure plan participant records are complete and accurate. Plan participants may include former employees, which records may be difficult to obtain.

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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