Pension Protection Act Blog

Another day has come and gone with no 403(b) regs.

If you’ve wondered why my posts have been a little light lately, it is due to the Final 403(b) Regs. Or I should say it is due to the absence of the Final 403(b) Regs. The IRS said they would finally be releasing these regulations by June 30th, which came and went with no regs. Every day, I check. Every day, no regs.

The reason these regulations are so important is that they are the first regulations issued for 403(b) plans since 1964. The IRS released the proposed Final 403(b) Regulations on November 16, 2004, with the expectation that the regulations would be finalized within a reasonable amount of time.

The second reason these regulations are so important is that the proposed regulations contained a requirement that 403(b) plans are stated on plan documents. Currently, 403(b) plans are not required to use plan documents. Until these regulations are finalized, it is impossible to actually write a 403(b) plan document which meet the requirements in these regs.

Some have grown weary of waiting, and have decided to take their own route. The New York Times reports that two teachers have filed a lawsuit against the N.E.A. over the investments it recommends to participants in their 403(b) plans. Michael Hoes of the ERISA Class Action Watch blog has a copy of the complaint posted on his blog as he states this may become an offshoot of the class action cases involving 401(k) fees.

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