HR Notes for Support Staff, Supervisors, and Managers

 

 

403(b) NEW RULES & REGULATIONS

 

What is a 403(b)?

 

This number represents a section of the Internal Revenue Code (IRC) that allows individuals to set up retirement savings accounts with money that is tax-deferred through payroll reductions.  Many companies have a variety of funds for individuals to invest their money.  The college currently has a list of a little more than 20 companies that have payroll slots.

 

Who is eligible to participate in these retirement savings accounts through the college?

 

All full-time and part-time employees are eligible to participate.

 

What are some recent changes to this plan?

 

In late 2007, the IRS issued the most comprehensive set of regulations affecting 403(b) qualified plans in 43 years.  The college is now in the process of reviewing its 403(b) program in order to comply with the new regulations by the required date of January 1, 2009.  In addition to a number of new rules and regulations, the college must also develop a written plan and conduct a thorough evaluation of its current vendors.

 

If Im a participant now, what does this mean to me?

 

The company that you currently participate with may not become an approved vendor as of January 1, 2009. 

You will have the option to choose another company for payroll reductions.  A committee will determine which companies will be the new approved vendors.

 

Can I transfer my money to another company right now?

 

Transfers of money to other companies might not be possible until the new documents are established.  The college is working quickly to have these documents in place.  This is not applicable to employees who are age 59 and ½ or older.

 

Can I transfer money to another fund within the same company?

 

Yes.

 

How will I know when the college has finalized the program and who will be the "approved vendors?"

 

The IRS continues to issue new guidance on these rules and clarify the new requirements.  As the college updates its 403(b) program to comply with the new rules and regulations, college-wide emails, memorandums, and bulletins will keep employees up-to-date on the status and outcome.  In addition, the Benefits website will be updated with the same information at www.valenciacc.edu/HR/benefits.asp.

 

 

 

Please distribute this bulletin to all full-time and part-time employees within your department.  If they should have questions regarding the above information, please direct them to contact Human Resources at x8033.

 

 

 

                                                                                                                        HR Notes #83

                                                                                                                        June, 2008