October 21, 2008 / Law Alert

Final 403(b) Regulations Require Action by January 1, 2009

The Treasury Department issued final regulations under Internal Revenue Code Section 403(b), which are effective beginning January 1, 2009. The regulations essentially bring 403(b) plans in much closer alignment with other deferred salary reduction arrangements, such as 401(k) and 457(b) plans, and make employers more responsible for the administration of their 403(b) plans than they were in the past. The following discussion summarizes the new regulatory requirements and lists what an employer needs to do in the coming months to prepare for the January 1, 2009 effective date.