Open Letter from ADMIN Partners

Over the past few months we have received a number of calls from clients inquiring about the method we are using to calculate the number of plan participants for invoicing purposes. The intent of this document is to clarify what plan participant classes are covered under your 403(b) written Plan document. These covered classes are the same individuals that the IRS considers active in the plan and ADMIN is responsible to provide compliance monitoring and record keeping services on your behalf. This is the actual participant number we use for invoicing purposes.

Who does the IRS consider an active plan participant under your 403(b) Plan?

Essentially an active plan participant is any current or former employee who has a positive balance in a 403(b) account or annuity contract that meets any of the three criteria below:

Post-regulation active participant. Any employee or former employee who made or received 403(b) contributions after January 1, 2009 who maintains a positive balance in a 403(b) account or annuity contract.

Post-regulation participants (with de-selected vendors). Any employee or former employee who made or received 403(b) contributions to a de-selected 403(b) investment provider after January 1, 2009 and who maintains a positive balance in a 403(b) account or annuity contract.

Orphaned participant. Any employee who made or received a contribution after December 31, 2004 to a 403(b) investment provider (regardless of whether the vendor is an approved vendor or was subsequently de-selected) and who maintains a positive balance in a 403(b) account or annuity contract.

You will recall that when we established your Plan we requested information on employees who made or received a contribution after December 31, 2004 through your organization.

Tags: 403(b) plan