Effective Dates Of The New Regulations

Our plan has a non-calendar plan year. Does this affect the effective date of the new regulations for our plan?

Generally these regulations were effective January 1, 2009 even for plans with non-calendar plan years, except with regard to the plan document requirement, which was effective on December 31, 2009.

Were all of the provisions effective as of January 1, 2009?

There are a few exceptions to the January 1, 2009 effective date:

  • The requirement that all 403(b) plans must put plan provisions in writing is effective on December 31, 2009.
  • The new restrictions on contract-to-contract transfers to carriers that do not have an approved payroll slot generally apply to any transfers after September 24, 2007.
  • The repeal of Notice 89-23 nondiscrimination safe harbors for noncontributory 403(b) plans is effective for plan years beginning after December 31, 2008.
  • The repeal of the Notice 89-23 also eliminated the provision allowing TDA plans to exclude certain additional categories of employees including union employees and employees who have elected to participate in a governmental 457(b) plan instead of the 403(b) plan. But this provision did not apply until January 1, 2010.
  • The final regulations extend the prohibition on in-service withdrawals prior to a distributable event such as severance from employment, disability or attaining age 591⁄2, which formerly only applied to employee contributions to 403(b)(1) annuity contracts and not to employer contributions to such contracts. However, the new withdrawal restriction only applies to employer contributions to 403(b)(1) annuity contracts issued after December 31, 2008.

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