Contents

• Hot Topics In The World Of 403(b) Plans — Plan Terminations
• Contact SC&H Tax & Advisory Services

Not-for-Profit Services

We specialize in providing not-for-profit organizations a variety of comprehensive solutions for their accounting and consulting needs.

At SC&H, we know that not-for-profit organizations are unlike any other type of business. From uncertain budgets and lean accounting staff, to board relations and unusual tax issues, your goals and challenges are unique. Only a service provider with a complete grasp of these issues and a strong commitment to serving not-for-profit organizations can provide the responsiveness and quality of services that will exceed your expectations.

Many of our partners and managers are active on not-for-profit boards, which provide us with a first hand understanding of your needs. This understanding is why SC&H has become the CPA and management consulting firm of choice for many not-for-profit entities including educational and healthcare institutions, associations, religious organizations and foundations.

Services include:

• Financial statement audits and reviews
• A-133 audits
• Employee benefit audits and consultation
• Internal auditing
• Evaluation of internal controls
• Tax compliance
• UBIT studies and FIN 48 analysis
• Strategic planning
• Change management
• Organizational development

Testimonials

"SC&H has the breadth of a national firm while providing personalized local service in an efficient and customer friendly manner. I highly recommend this firm." - CFO of a not-for-profit organization

"I am pleased to share my thoughts regarding my association with SC&H. They have provided tax preparation and advisory services to my organization for over ten years. I find the professionals at SC&H to be very knowledgeable of the issues facing not-for-profit organizations. I highly recommend this firm." - CFO of a not-for-profit organization

Hot Topics In The World Of 403(b) Plans — Plan Terminations

As the recent IRS and Department of Labor continue to ramp up regulation and enforcement on previously unregulated section 403(b) plans and their sponsors, the question that is in many employers minds may be "Would it be easier just to terminate this plan and start anew?" The answer is not as easy as it may seem for employers. While terminating a 403(b) plan is legally allowed, there are many things that plan sponsors must consider when contemplating a termination. In February 2011, the IRS issued Revenue Ruling 2011-7 to provide guidance for plan sponsors on if and how they can terminate a tax sheltered annuity 403(b) Plan.

According to Rev. Rul. 2011-7, 403(b) plan documents may include language to allow a full plan termination at the sponsor's discretion, however, depending upon the investments held by the plan, such a termination may be difficult if not near impossible. In order for a plan to be deemed fully terminated in the eyes of IRS, all accumulated benefits under the plan must be distributed to all plan participants and their beneficiaries as soon as administratively possibly after the plan sponsor makes the resolution to terminate the plan. Since many plans are heavily invested in annuity contracts which have distribution restrictions, fully terminating and dissolving a plan may be a long and arduous process.

Given the IRS is fully aware of the fact that such a termination may take a long time, it has further restricted what plan sponsors can and cannot do after the resolution to terminate the plan. Rev. Ruling 2011-7 states that an employer may not contribute to any 403(b) plan not connected with the existing plan for twelve months before the date on which the decision is made to terminate the plan and ending twelve months after all of the plan assets have been distributed.

Terminating a 403(b) plan is not an easy process. In order to avoid any possible issues and penalties and to ensure the plan is be deemed terminated in the eyes of the IRS and DOL, plan sponsors should work closely with their providers during the termination process to adhere to all of the rules set forth by Rev. Ruling 2011-07.

For further information on employee benefit plans or if SC&H can assist your organization, contact Jen Amato at (410) 403-1608.

For More Information

For more information about not-for-profit services offered by SC&H Tax & Advisory Services, LLC, contact Michael Young or Lori Burghauser.

Michael Young
Audit Director
(410) 403-1513

Lori Burghauser
Tax Principal
(410) 403-1616

Unsubscribe