Friday, November 21, 2008
RSC responds to new regs for handling 403b annuities
The Internal Revenue Service (IRS) has issued several changes to the regulations for the administration of 403b tax sheltered annuity plans offered to Concord-Carlisle Regional School District employees. Until now, employees picked an investment vendor, filled out a salary reduction form and the school district set up the payroll deductions and sent the funds to the vendors. Generally, the 403b program was a relationship between the employee and the vendor and the school system was a conduit for the funds. Starting January 1, 2009, the full responsibility will shift to school district administrators for creating and managing a plan document, oversight of investment product vendors, monitoring investment limits, and implementing other plan requirements such as hardship loans.
School districts generally do not have the capacity to take on this these tasks. Over the past several months there have been forums by the Massachusetts Association of School Business Officials and other groups to understand the changes. A Collective Purchasing Group (CPG) will be formed of approximately 40 towns to be led by the Lincoln-Sudbury school district. Costs will be shared across the CPG.
The Regional School Committee (RSC) voted at their November 13 meeting to authorize the district administration to enter into a contract with Mid America Administrative and Retirement Solutions, Inc. for services. ∆
© 2008 The