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Although the 403(b) marketplace is changing, Symetra Financial stands ready to provide you with the information, tools and support you need to be successful. If you have questions, please contact us at invest@symetra.com or 1-800-706-0700.
FAQs
Action Items
FAQs
Q. What's happening?
A. For the first time in 40 years, the IRS plans to unveil comprehensive 403(b) guidance in the form of new regulations. If the regulations are released in late 2006, as anticipated, changes will likely go into effect on Jan. 1, 2008. However, because the rules require extensive contractual and administrative changes, school districts and nonprofit organizations may be given additional time to comply.
These new regulations will bring 403(b) requirements much closer to those of 401(k) plans. And because Symetra is an active participant in the 401(k) market, we have the industry expertise to help guide you through these changes.
Q. What kinds of changes are expected?
A. The proposed regulations — which were initially revealed in 2004  — will require much more involvement than in the past. Employers now have fiduciary responsibility for their plans. Going forward, they will be required to make sure their program is administered in accordance with the terms of what will become, for many, their first 403(b) plan document.
Q. Will Symetra provide a model plan document?
A. Yes, Symetra is committed to providing you and your clients with the resources and support you need to ensure a smooth transition. Once the new rules become available, we will provide a fully compliant, model written plan at no cost. Additionally, our expertise in the 401(k) market will allow us to offer plan sponsors assistance in administering their plan in accordance with the newly required plan document.
Q. Will there be other regulatory changes?
A. Yes. There will likely be IRS guidance on non-discrimination testing, transfers, distributions and plan termination. Additionally, already effective as of Feb. 14, 2005, no new life insurance policies may be issued to 403(b) program participants.
Q. Which employers are impacted?
A. Only employees of 501(c)(3)-exempt organizations and public schools are eligible to participate in 403(b) annuity and custodial accounts. Although 401(k) retirement plans and 457(b) deferred compensation plans are available to these organizations, most have continued to offer 403(b) annuities because of the unique features they provide, such as no non-discrimination testing for elective deferrals and no plan audit requirement.
Q. I'm worried these changes could negatively impact my business. Can Symetra help?
A. Symetra offers a broad portfolio of products that may provide cross-sell opportunities that fit nicely into your current business model.
For example, are you aware of the tremendous opportunities in the small-401(k) market? In 2006, companies with fewer than 250 employees will launch an estimated 15,000 to 18,000 401(k) plans — a 25 percent to 50 percent jump over the previous year (12,000 in 2005)1. Because the small 401(k) plan market is one of Symetra's specialties, we can show you how to embrace this emerging opportunity.
Other income-boosting opportunities include:
To learn more about how we can help you tap into these emerging business opportunities as a complement to your 403(b) business, contact our Sales Center at invest@symetra.com
or 1-800-706-0700.
New 403(b) Rules Action Items
The IRS's new rules have two key action items as outlined below.
There is, of course, lots of detailed guidance on everything from nondiscrimination testing to asset distributions. All of this will be incorporated into the written plan document, which Symetra will provide at no cost to you and your client.
When the new rules become available, you can look to us for information on the new, must-know details impacting you and your clients, as well as the resources and support you need to ensure a smooth transition.
Plan Sponsor Action Items |
How Symetra Can Help |
1. Maintain a written plan document.
Employers must manage their 403(b) in accordance with a written plan that details plan eligibility, benefits and limits, approved vendors and products, and administration. |
When the new rules go into effect, Symetra will provide you and your clients with a fully compliant, no-cost written plan. Additionally, our expertise in the 401(k) market will allow us to offer plan sponsors assistance and support in administering their plan in accordance with the newly required plan document. |
2. Communicate with employees.
Employers must now take an active role in communicating with employees at least once a year about plan eligibility and how to make changes to their contributions. |
When the new rules go into effect, Symetra will offer model communications your clients can customize and use with their employees. |
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