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Compliance May 8, 2008
EBSA Studying 403(b) Orphan Contract Problem
May 8, 2008 (PLANSPONSOR.com) - A top Department of
Labor (DoL) benefits regulator on Thursday revealed that the
agency is studying ways to help 403(b) plan sponsors better
deal with the difficult problem of getting an exact
accounting of their orphan contracts.
Reported by Fred Schneyer
Scott C. Albert, Chief of the Division of Reporting Compliance at the Employee Benefits Security Administration (EBSA), offered that information in a Webinar discussing employee benefit plan reporting requirements.
With new 403(b) Form 5500 requirements becoming effective for the 2009 plan year, Albert noted the difficulty many plan sponsors are having tracking down all contracts between annuity providers and participants including those involving former employees (See 403(b) Summit: New Form 5500 Regs Mean “Scary” 2009 Plan Year for 403(b) Sponsors ). Albert said plan sponsors will be expected to “make a good faith effort to track them down.”
403(b) sponsors attending PLANSPONSOR’s recent 403(b) Summit heard a series of discussions about how, in many cases, providers are refusing to give plans the details of the contract that may be executed by the provider directly with the participant (See 403(b) Summit: With Investment Options, More Is Not Always Better ).
While 403(b) sponsors generally are having to shoulder a significantly heavier regulatory burden with the recent imposition of new government regulations, Albert pointed out that the due date for the Form 5500 report is not until July 31, 2010, and can be extended to October 15. Offered Albert: “There is plenty of time to prepare.”
The presentation from Thursday’s Webinar is available here .