Employee Benefits Security Administration releases field assistance bulletin on tax sheltered annuity programs

Archived News Release — Caution: Information may be out of date.

Washington - The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) today released Field Assistance Bulletin (FAB) 2007-02 clarifying that tax-sheltered annuity programs, also known as “403(b) plans,” that comply with recently released tax regulations under section 403(b) of the Internal Revenue Code can still be structured so that they are excluded from coverage under Title I of the Employee Retirement Income Security Act (ERISA).

The Labor Department’s regulation on 403(b) plans provides a “safe harbor” so that, under certain circumstances, a tax sheltered annuity program, funded solely with employee contributions, is not treated as a pension plan “established or maintained” by the employer for purposes of Title I of ERISA. The FAB 2007-02 confirms the department’s view that tax exempt employers can engage in a range of activities to facilitate the operation of a tax-sheltered annuity program under the new IRS regulations and still remain within the safe harbor’s criteria.

The FAB is part of the department’s ongoing compliance assistance program to help employers, plan officials, service providers and others comply with ERISA. Field Assistance Bulletins are available on the Internet at www.dol.gov/ebsa.

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Archived News Release — Caution: Information may be out of date.