On December 11, 2008 the IRS issued a notice announcing relief for retirement plans covering employees at public schools, colleges and universities, and other tax exempt organizations (usually referred to as 403(b) plans), that do not have a written plan document in place by January 1, 2009.
Due to the difficulty in satisfying the written document requirement by January 1, 2009 that many plan sponsors have expressed, the IRS will treat these plans as meeting the requirements of 403(b) and the regulations during the 2009 calendar year if:
* By December 31, 2009, the sponsor of the plan has adopted a written 403(b) plan that is intended to satisfy the requirements of 403(b) and the regulations.
* During 2009, the plan sponsor operates the plan in accordance with a reasonable interpretation of 403(b) and the related regulations.
* By the end of 2009, the plan sponsor makes its best effort to retroactively correct any operational failure during the 2009 calendar year to conform to the written plan.
Further guidance is expected from the IRS regarding 403(b) plans, including a revenue procedure establishing programs for 403(b) plans to obtain IRS approval of the plan document and allowing these plans to make remedial amendments to retroactively fix plan provisions under rules similar to those that apply for 401(a) qualified plans.
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