Friday, January 9, 2009
The San Francisco Chronicle has published an Associated Press story highlighting the substantial changes that many nonprofits will have to make to their retirement plans during the current year. The new rules for section 403(b) plans - the governmental and nonprofit equivalent of section 401(k) plans used by for-profit entities - require the adoption of more detailed vendor guidelines, eligibility requirements, and financial procedures. Nonprofits must immediately comply with the new rules, which became effective as of the start of this year, but have until January 1, 2010 to bring their written plan documents into conformity. As the article notes, while this is a significant amount of time many of the affected organizations lack sophisticated benefits staff to make the necessary changes. More details about these new rules are available at the IRS Retirement Plans website, including a "Retirement News for Employers - Special Edition - December 2008" publication discussing the compliance deadlines.