As the IRS has extended the 403(b) plan document compliance deadline, this gives plan sponsors an opportunity to rethink how their retirement plans are structured, according to experts at Diversified Investment Advisors, Inc., a national investment advisory firm specializing in retirement plans. According to Diversified, the extension could be “a nice holiday gift” for non-profit employers who are considering compliance and vendor consolidation all at one time.
“While plan sponsors still need to administer their plans in accordance with the new 403(b) regulations, they should not be lulled into a false sense of security simply because they have more time to adopt a plan document,” says David Ray, vice president and national practice leader of not-for-profit and public sector business units at Diversified. “One of the thorniest issues for not-for-profit employers has been the availability of too many provider choices which, for many, has created a conundrum of not meeting regulations. Offering more than one provider to employees is fraught with problems ranging from confusion among employees as to which provider is best to inconsistent messages from providers. Using a single source provider that is currently ready to meet the compliance requirements eases the burden for plan sponsor administrators and precludes the issues that many multi-vendor 403(b) plans now face.”