The American Council of Life Insurers says the proposed 403(b) plan prototype program should make room for employers to include vesting schedules.
The Internal Revenue Service recently proposed streamlining the process that schools and other nonprofit employers use to set up 403(b) retirement plans, by permitting vendors to create prototype plans.
The ACLI, Washington, is welcoming the announcement of the prototype program.
“This program has the potential to be a great help to plan sponsors in keeping their plans compliant,” ACLI retirement security specialists — Walter Welsh, James Szostek and Shannon Salinas — write in a comment letter.
But the ACLI retirement specialists say one major omission is lack of a mechanism for employers that want to have employees qualify for benefits over a specified period of time, and another concern is language that appears to give employers unilateral authority to change the plan terms.