Have you reviewed your 403(b) approved vendor list lately?

If not, now is the time! Before the new 403(b) regulations that increased compliance requirements for plan sponsors came out in 2009, some districts had 20+ vendors. It is now much more common to see districts with one to five approved vendors.

Compliance of your 403(b) ultimately falls on you as the plan sponsor, not on your vendors. If no one is utilizing a vendor in your list, now is a good time to deselect that vendor. Fewer vendors makes your 403(b) easier to administer as there is less oversight on your part.

To deselect a vendor, you must follow a formal process which includes the following:

  • You must have your plan document updated by your plan document creator. You are not allowed to simply remove a vendor from the approved vendor list you hand out to employees.
  • When any amendment is completed, you must notify all of your vendors so they can administer your plan per your plan document and approved vendor list.
  • A deselection notice must be sent to deselected vendor.

Member Benefits offers a plan document service at no cost to the district. We specialize in 403(b) plans and can help you make sure your plan document is in compliance.

Please contact one of our Plan Administration Consultants at 1-800-279-4030, Option 3 for more information and assistance.

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