Non-Profits Perplexed by Sweeping New Retirement Plan Regulations
April 10, 2008 (Des Moines, IA) — Non-profit plan sponsors face big decisions to meet complex new rules for 403(b) retirement plans. And they want help.
In fact, 77 percent of 403(b) sponsors want help complying with the regulations, according to a new study from Spectrem Group1. Until now, however, little direction has been available.
Fortunately, an easy-to-use new tool from the Principal Financial Group® simplifies the complex. The tool walks non-profits and their financial professionals through the decision-making process. Using model scenarios, it outlines the actions needed for three 403(b) plan structures.
The new rules require plan sponsors to make several critical changes by January 1, 2009.
Complex Regulations
"Sponsors now have to think about their 403(b) plans in a whole new light," said Aaron Friedman, national non-profit practice leader, The Principal®. "The new rules require that 403(b) plans be run more like 401(k) plans. That's a major change in and of itself."
"It's even more complicated because not all 403(b) plans are structured alike. Plan sponsors must take different actions depending on the structure of their plan," said Friedman. "Throw in the new rules for Form 5500s and guidance on grandfathering from the Internal Revenue Service and the complexity has increased substantially."
How the tool from The Principal can help
The new interactive tool from The Principal helps plan sponsors and financial professionals:
- Understand the new regulations with plain-language explanations
- Identify the structure of their 403(b) plan by reviewing criteria for three model plans
- Learn what steps they need to take for their model
- Fulfill their compliance obligations and meet IRS deadlines
The tool is available at www.principal.com/403btool.
Other 403(b) resources from The Principal
The new 403(b) tool is part of a comprehensive education program from The Principal on the new regulations.
- An easy-to-use guide gives a before-and-after snapshot of key provisions of the 403(b) regulations.
- Two white papers are available—one by renowned 403(b) expert David Powell of the Groom Law Group and the other by Aaron Friedman.
About the Principal Financial Group
The Principal Financial Group® (The Principal®)1 is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune® 500, the Principal Financial Group has $311.1 billion in assets under management2 and serves some 18.6 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1) Not-For-Profit Sector Defined Contribution Plans, Spectrem Group 2008
2) "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group
3) As of December 31, 2007
