403(b) Plans
Caplin & Drysdale

403(b) Plans

Date: 2/10/2009


The deadline for documentary compliance with the new Code section 403(b) regulations has been extended to December 31, 2009, by which time there may be a prototype or determination-letter program. Operational compliance is still required as of January 1, 2009, though church plans need not comply until 2010. However, certain operational failures that occur in 2009 may be corrected.

403(b) Documentary Compliance. In 2007, the Treasury issued final regulations that require the sponsors of Section 403(b) plans to maintain their plans according to the terms of a written plan document that satisfies certain requirements. The regulations required that the written plan document be drafted and effective by January 1, 2009. The new guidance still requires the written document of a non-church plan to be effective by January 1, 2009, but the document may be adopted as late as December 31, 2009.

403(b) Operational Compliance. If, during 2009, the plan is not operated in accordance with the plan document as ultimately adopted, the failures may be corrected. However, all corrections must be made during 2009, be retroactive to January 1, 2009, and be consistent with the general principles set forth in the IRS' Employee Plans Compliance Resolution System ("EPCRS").

403(b) Plan Determination Letter and Prototype Program. The IRS is considering adopting a prototype program, which would enable sponsors to adopt pre-approved plans. Some vendors have already begun developing prototypes in anticipation of the development of such a program. If you are interested in eventually adopting a pre-approved prototype plan, your tax advisor may be able to recommend a vendor. However, it is important to keep in mind that the IRS has not yet approved these plans.

The determination letter program will be developed some time after the prototype program and will permit sponsors who do not adopt prototype plans to ensure their compliance with applicable regulations.


About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
New York, NY Office:
295 Madison Avenue
12th Floor
New York, NY 10017


This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2022 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practices

View our non-mobile site Menu