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Erisa Rules For 403b In Michigan
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When is a 403(b) plan subject to ERISA? All 403(b) plans are subject to Title I of ERISA unless an exemption applies.
An eligible employer that has established a 403(b) plan must operate and maintain the plan by taking certain actions to ensure it continues to provide tax-deferred benefits to plan participants.
Generally, you don't report contributions to your 403(b) account (except Roth contributions) on your tax return. Your employer will report contributions on your 2023 Form W-2.
All 403(b) plans are subject to Title I of ERISA unless an exemption applies.
Millions of teachers and employees of tax-exempt organizations invest in 403(b) retirement plans. The Department of Labor (DOL), Securities and Exchange Commission (SEC), and Internal Revenue Service (IRS) take steps to oversee some 403(b) plans or their investment options, or both.
403(b) Plans and Federal Pension Law Nearly all private sector pension plans are governed by the Employee Retirement Income Security Act of 1974 (ERISA; P.L. 93-406), which is enforced by the Department of the Treasury, the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation (PBGC).
403(b) plans that are subject to ERISA must comply with DOL regulations, which may include obtaining an employee identification number (EIN) for the plan. Governmental, non-electing church and other 403(b) plans that meet the safe-harbor requirements under the DOL regulations are not subject to ERISA.
Basic ERISA compliance requires employers provide notice to participants about plan information, their rights under the plan, and how the plan is funded. This includes ensuring plans comply with ERISA's minimum standards, recordkeeping, annual filing and reporting, and fiduciary compliance.
One key exception is the ADP test that normally applies to salary deferrals. As a trade-off to the universal availability requirement (described above), 403(b) plans are not required to pass the ADP test. This allows any highly compensated employees to maximize their deferrals.
Five-year post severance contributions are employer contributions made to a 403(b) plan after the employee's severance from employment. In general, post severance contributions must meet the following: Employer contributions may be made for an employee for up to 5 years after the employee's employment ends.