Compliance June 21, 2007

IRS Continues Project to Ensure Compliance with 403(b) Coverage Rules

June 21, 2007 (PLANSPONSOR.com) - The Internal Revenue Service (IRS) has announced it is expanding its outreach effort to ensure that public schools throughout the United States are complying with the universal availability requirement for retirement annuities they may offer.
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The IRS announcement said its Employee Plans Compliance Unit (EPCU) has started sending questionnaires to public school districts in all states under the 403(b) Universal Availability project. In June 2006 the EPCU sent questionnaires to public schools and districts in New Jersey, Missouri and Washington. 

The EPCU has now begun contacting school districts in Alaska, Florida, Hawaii, Illinois, Nevada, Pennsylvania, Tennessee and Virginia.  School districts in the remaining states will be contacted through 2008, the announcement said.

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“Our pilot project in three states showed fairly widespread noncompliance by schools with the universal availability requirement for 403(b) plans,” said Joseph Grant, Director of the IRS Employee Plans division, in the announcement. “But we believe most of it was due to a lack of understanding about what the law requires, not a deliberate failure to comply.”

The IRS said typical noncompliance involves excluding participation by certain classes of employees, such as substitute teachers, janitors, cafeteria workers and nurses.  The law requires that all public school employees normally expected to work 20 hours per week must be offered the opportunity to participate in a 403(b) plan if the school or district sponsors one.

The IRS will analyze responses to the questionnaires and if a problem is found school officials should use one of the solutions outlined by the IRS in a follow-up letter. The IRS said it will not impose a sanction on schools or districts for which a problem is found.

More about the project can be found at  http://www.irs.gov/ep .

Products June 20, 2007

IW Financial Offers Solution for Compliance with Divestment Laws

June 20, 2007 (PLANSPONSOR.com) - IW Financial Inc. (IWF) has announced it offers a solution that will enable institutional investors, asset managers, and plan sponsors to satisfy the divestment requirements of all pending or future legislation on Sudan, or Iran and other U.S.-designated sponsors of terrorism.
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According to the announcement, with its partner Conflict Securities Advisory Group (CSAG), a research firm dedicated exclusively to identifying and assessing companies that have business in, or with, State Department-designated terrorist-sponsoring states, IW Financial provides research-based technology solutions that enable investment professionals to analyze portfolio holdings using environmental, social, and governance (ESG) criteria.

Sam Pierce, chief executive officer at IW Financial, said in the announcement, “[I]t is clear that states require a solution that can satisfy all potential terrorism-related requirements.  IWF is now in a position to offer that solution.” Roger W. Robinson, Jr., President and CEO of CSAG, said the firms’ solutions can address a number of specific policy guidelines for divestment.

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The new solutions are immediately available, and more information can be found at www.iwfinancial.com or www.conflictsecurities.com .

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