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403(b) Plans

For Non-Profit Organizations

A 403(b) plan with administrative and investment services offered by the non-profit client services division of the Principal Financial Group^® lets employees save for retirement by reducing current salary on a before-tax basis. It can be used with revenue sharing, money purchase, defined benefit, and nonqualified plans.

New 403(b) regulations released July 26, 2007

New final regulations from the Treasury Department may have an impact on clients with 403(b) plans. The new rules were created to bring 403(b) plan regulations more in line with requirements for 401(k) and 457 plans. The regulations generally apply to taxable years beginning on or after January 1, 2009. In general, the new rules require 403(b) plan sponsors to:

• Create a written plan document,
• Coordinate age-related and special 403(b) catch-up contributions, and
• Monitor the transfer of retirement funds among plan service providers

Relief to 403(b) Written Plan Document Requirement

On Dec. 11, 2008, the IRS released a notice that gives relief to 403(b) plan sponsors regarding the requirement to have a written plan document in place by Jan. 1, 2009. The Principal developed a Compliance News summary of the notice.

The Principal^® gives you an edge

The Principal has created documents to help you understand how these new regulations may affect you.

• The Principal is developing a four-part series of 403(b) Compliance Guides that provide a step-by-step transition plan that may help plan sponsors become compliant with the new regulations by the end of the year.
  • 403(b) Compliance Guide #1
  • 403(b) Compliance Guide #2
  • 403(b) Compliance Guide #3
  • 403(b) Compliance Guide #4 - Available in November 2008
    
• What are the new rules and what do they mean? The Principal has teamed with the Groom Law Group, one of the nation's largest employee benefits specialty law firms, to provide guidance and interpretation of these rules with the 403(b) Plan Sponsor's Guide to the New Final 403(b) Regulations white paper.
• What is the difference between the existing rules and the new rules? Get a side-by-side comparison and determine the potential impact with the 403(b) Final Regulations Guide.
• How do the new rules affect plan sponsors? Read the Practical Implications of the 403(b) Regulations white paper for how these regulations affect plan sponsors and actions they may consider taking.
• The Principal has developed an interactive 403(b) diagnostic tool to help employers consider steps they may need to take to comply with the final 403(b) regulations.

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation, 800.547.7754, member SIPC, and/or independent broker/dealers. Securities sold by a Princor Registered Representative are offered through Princor. Princor^® and Principal Life are members of the Principal Financial Group, Des Moines, IA 50392.

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