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New 403(b)
Regulations
Introduction
On July 23,
2007 the Internal Revenue Service (IRS) issued final
comprehensive regulations governing 403(b) plans for the
first time in 43 years. The general effective date of the
regulations is January 1, 2009—although the effective date of
some portions of the regulations is sooner.
Our third party administrator,
National Benefit Services (NBS), has prepared a summary of the
regulations available here:
Summary of
Final 403(b) Regulations.
As a result of
the new regulations, the DOE and NBS will be required to become
more involved than previously in the administration of the TSA
Program.
Transaction Authorization
In the past, transactions such as distributions,
rollovers, hardship withdrawals, loans, and transfers were
generally accomplished through your investment provider without
any DOE involvement. However, the new regulations now
require the DOE and your investment provider to share certain
information and to coordinate when performing these
transactions. A transaction authorization process will be
utilized in order to facilitate necessary coordination and
information sharing. If you wish to perform a
distribution, rollover, hardship withdrawal, loans, or transfer;
your investment provider must receive authorization from the
DOE's third party administrator, National Benefit Services
(NBS). Authorization is obtained through submission of an
Authorization Form (available on the Forms
page).
Please note that in addition to the Authorization Form, your
investment provider will likely still require submission of its
own paperwork. Contact your investment provider for
additional information.
How does the transaction authorization process work?
If you wish to initiate a distribution, rollover, hardship
withdrawal, loan, or transfer between investment providers you
should complete the following steps:
| 1. |
Download the appropriate Authorization
Form from the Forms page. |
| 2. |
Complete the Authorization Form and
attach any appropriate documentation. Instructions on
the Authorization Form will indicate what documentation, if
any, is required. |
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3. |
Fax or mail the
Authorization Form to the DOE's third party administrator,
NBS. The address and toll-free fax number are included
on the form. |
| 4. |
Complete any other paperwork required by
your current investment provider (contact your provider for
details). Your current investment provider will likely
still require submission of its own paperwork in addition to
the Authorization Form. The Authorization Form does
not instruct your provider to perform a transaction—it
authorizes the provider to perform a transaction you
request. |
NBS will review the Authorization Form to ensure the transaction
is in compliance with plan provisions and the Internal Revenue
Code. If the transaction is approved NBS will notify your
current investment provider (the provider that currently holds
your 403(b) assets). If the transaction cannot be approved
or if additional information is needed NBS will contact you by
mail.
Transfers
Transactions formerly known as "90-24 Transfers" have
been affected by the new IRS regulations. A transfer is
the movement of 403(b) money from one investment provider to
another while you are still employed by the DOE. You may
only transfer plan 403(b) assets to an investment provider that
has established an information sharing agreement with the DOE or
NBS. Investment providers that have established an
information sharing agreement are classified "Transfer
Eligible". A current list of Transfer Eligible providers
can be found on the
Investment Options page.
Transfers to providers that are not Transfer Eligible
may result in tax consequences. A DOE memo to all
Program participants was issued September 14, 2007 and provided
additional information (a copy of the memo is available
here).
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