IRS Simplifies Certain 403(b) Plan Terminations

“The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have issued guidance for employers and employees related to terminating 403(b) plans that fund benefits through 403(b)(7) custodial accounts.

As explained by the Treasury and IRS, the guidance reflects changes provided for in the Setting Every Community Up for Retirement Enhancement (SECURE) Act. In short, the landmark retirement legislation, which was passed last year, directed the IRS to issue guidance providing that individual custodial accounts (ICAs) may be distributed to participants in-kind upon plan termination, eliminating the requirement of a cash distribution. The SECURE Act requires the guidance to be effective retroactively for tax years beginning on and after December 31, 2008.” Continue reading.

Source: PLANADVISER
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