- November 2007 > Retirement Corner
The University of Texas Retirement Programs continue to evolve. One of the most significant recent changes has been establishing criteria for all companies receiving contributions from UT employees in a grandfathered status to meet in order to continue receiving those funds. The primary reason behind this change is the passage of the new IRS 403(b) Regulations.
What are the Regulations?
In July 2007 the IRS passed the first comprehensive overhaul of 403(b) Regulations in over forty years. The new regulations will finally bring the same level of guidance to the 403(b) markets as other legislation has to 401(k) plans.
Beginning January 1, 2009, the new rules will affect all 403(b) arrangements regarding employer responsibilities, due diligence and compliance expectations.
What are some specific changes?
The three major changes are:
However, other important changes were made adding additional responsibilities to employers, such as:
What does this mean to me?
The University of Texas Optional Retirement Program (ORP) and the UTSaver Tax Sheltered Annuity (TSA) are both 403(b) plans. Therefore, both are impacted by the new 403(b) regulations. It was because of these regulations that UT System sent out a Request for Submission (RFS) to all 111 companies receiving contributions in a grandfathered status.
Establishing criteria for all companies is an essential step in allowing the UTRetirement Programs to be compliant with the new 403(b) Regulations and also ensuring employees have a strong retirement program.
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