What is the intent of the final 403(b) regulations?
The final regulations accomplish multiple purposes. They remove provisions that no longer have effect. They incorporate a number of items that provide interpretive guidance. But, generally, the final regulations reflect the numerous IRS rulings, bulletins, procedures, etc., that have been issued for 403(b) plans in previous years. An overarching message in these regulations is compliance. There is strong focus on compliance with the rules related to distributions and loans, particularly in plans with multiple fund providers. The IRS has made it clear that the employer has an obligation to ensure that distributions and loans in the aggregate, among all fund providers of the employer, do not violate permitted limits. The employer may use discretion in determining how plan responsibilities are divided. However, it is clear that the plan cannot rely solely on information provided by the participant. So, the need for accurate information sharing is highlighted in the final regulations.
