Employers that allow employees to contribute to 403(b) plans and arrangements need to adopt a plan document by Dec. 31, 2009, if they have not already done so. In adopting a plan document, employers that have a voluntary 403(b) plan which the employer intends to be exempt from ERISA should review the plan document and their practices to confirm the 403(b) plan is not subject to ERISA.

The final regulations under Section 403(b) of the Code, published in July 2007, required all 403(b) plans to have a plan document in place by Jan. 1, 2009. When the enormity of that requirement became apparent, the IRS published Notice 2009-3, which extended the deadline to adopt a plan document for 403(b) plans to Dec. 31, 2009. Employers should contact the retirement provider they work with to ensure that their plan will comply with this plan document requirement. Failure to comply may result in past and current contributions being included in employee compensation.

Employers who have already adopted a plan document for a 403(b) plan may need to amend the plan document this year to keep the plan document up to date. Plan documents need to be revised almost annually to reflect changes in the laws and regulations that govern retirement plans. Employers who have a plan document may need to amend their plan documents to account for recent law changes -- for example, changes under the Pension Protection Act of 2006. Employers should contact the retirement provider they work with to confirm their plan document is up to date with all required amendments.

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