Long-Awaited Final 403(b) Regulations
Offer Improved Plan Options

LOOKING FOR AN opportunity to strengthen existing relationships with clients, forge new ones, and write business in an underserved market?

For the first time in 40 years, the Treasury Department and the Internal Revenue Service have updated the rules and regulations for 403(b) plans, making them more in line with the traditional 401(k) market. The changes, issued July 26 and generally effective January 1, 2009, provide advisors the opportunity to offer tax-exempt organizations a much-improved retirement plan.

Regulation highlights

A few of the highlights of the final regulations are as follows.

• 403(b) programs now must be maintained pursuant to a written plan document, regardless of Employee Retirement Income Security Act (ERISA) status. The document must provide the terms and conditions for eligibility, benefits, applicable limitations, the contracts available under the plan, and the time and form of benefit distributions. 

• The employer-maintained plan document should allocate and coordinate the responsibilities of the employer and the financial institutions that administer the 403(b) contracts.

• There are new requirements on investment changes between 403(b) contracts under the same plan. Such “exchanges” are permitted only if certain requirements are met, including that the plan provides for the exchange and the employer enters into an information-sharing agreement with the issuer of the new 403(b) contract.

For more information on the key provisions of the final 403(b) regulations, tools to help prospecting, or additional MassMutual products and services, please contact your local MassMutual representative or call 1-866-444-2601. You can also visit us at www.massmutual.com/powertogrow.