Rules &
Oversight

In-depth technical analysis of the regulatory environment governing 403(b) and governmental retirement plans. We continuously track IRS rulings, Department of Labor (DOL) directives, and legislative developments to maintain a comprehensive record of fiduciary duties, disclosure mandates, and reporting obligations relevant to plan sponsors and service providers.

Current Active Regulatory Phase SECURE 2.0 Transition Period Active Enforcement Period: Fiscal Years 2024-2025
Legal Disclaimer: This page provides informational content only and should not be interpreted as legal or tax advice.
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IRS Section 603 Overview

High-Earner Catch-Up Requirement

Responsible Agency Internal Revenue Service (IRS) Authority
Plans Impacted Applies to 401(k), 403(b), and 457(b) Plans
Implementation Date Effective January 1, 2026 (Delayed)

Summary of Changes

Previous Regulation

Previously, participants aged 50 and older were allowed to make catch-up contributions on a pre-tax basis without regard to their total annual earnings. This meant that all eligible employees over 50 could contribute additional amounts to their retirement accounts using traditional pre-tax deferrals, regardless of how much they earned during the year.

Updated Rule

Under the new mandate, participants whose wages exceeded $145,000 in the prior year (with this threshold adjusted annually for inflation) are required to direct their catch-up contributions to a Roth (after-tax) account, meaning these additional contributions must be made with after-tax dollars rather than pre-tax funds.

Fiduciary Responsibility

Plan sponsors have a fiduciary duty to ensure their payroll and recordkeeping systems accurately track participants’ prior-year compensation and automatically allocate catch-up contributions to the Roth account when required. Failure to properly implement these procedures could lead to plan disqualification risks under IRS operational guidelines.

Source: IRS Notice 2023-62 (Administrative Transition Period) View Full Document
Department of Labor's ERISA Oversight

Retirement Security Rule

Responsible Agency U.S. Department of Labor (DOL)
Entities Subject to Regulation Registered Investment Advisors and Licensed Insurance Agents
Implementation Date Enforcement Suspended Due to Ongoing Litigation

Summary of Changes

Historical Standard

The "five-part test" established in 1975 required that fiduciary advice be given on a regular, ongoing basis to qualify under ERISA. This meant that only advisors providing continuous guidance were considered fiduciaries responsible for acting in the best interests of plan participants.

2024 Expansion

The updated rule broadens the fiduciary definition to include even one-time advice interactions, with a particular focus on guidance related to IRA rollovers. Individual Retirement Account (IRA) rollovers specifically involving rollovers from 403(b) retirement plans, expanding oversight to these transactions.

Disclosure Requirements

Advisors are now required to provide written confirmation of their fiduciary status along with a detailed disclosure of any potential conflicts of interest, such as commissions or revenue-sharing arrangements, when recommending rollovers from university-sponsored retirement plans.

Source: Federal Register, Volume 89, Number 85 (Final Rule) View Full Document

Reporting & Disclosure Calendar

Key filing deadlines and reporting responsibilities for 403(b) plan sponsors as mandated by ERISA and the Internal Revenue Code.

Filing Obligation Filing Deadline Intended Recipients Required Form or Documentation
Annual Plan Report Submission Due within seven months following the close of the plan year Department of Labor and Internal Revenue Service Form 5500: The annual report filed by retirement plans to the Department of Labor, detailing financial condition, investments, and operations.
Summary Annual Report (SAR): A participant-friendly overview of the Form 5500 filing, summarizing key plan information each year. Due within 9 months after the end of the plan year, with a possible 2.5-month extension. Participants: The employees or beneficiaries enrolled in the retirement plan who receive disclosures and reports. Disclosure Statement
Participant Fee Disclosure: Annual communication outlining fees and expenses charged to plan participants, promoting transparency. Provided annually, typically within 60 days after the plan year ends to keep participants informed. Participants: The employees or beneficiaries enrolled in the retirement plan who receive disclosures and reports. ERISA 404(a)(5): A regulatory section requiring clear disclosure of plan fees and expenses to participants.
Universal Availability Notice: An annual notice informing eligible employees about their right to participate in the retirement plan. Recommended to be distributed annually to ensure all employees are aware of their enrollment options. All Employees: The broad group of workers who must be offered access to elective deferrals under the Universal Availability rule. IRS Regulation: Federal rules issued by the Internal Revenue Service governing tax-qualified retirement plans.

The "Universal Availability" Rule

This rule is essential for 403(b) plan sponsors: if any employee is allowed to make elective contributions, then the plan must offer this option to almost all eligible employees without discrimination. Nearly all employees must have the opportunity to participate and contribute to the plan if the option is available to any individual employee.

Exceptions to this rule are narrowly defined and include students, certain part-time workers who put in fewer than 1,000 hours annually, and non-resident aliens without U.S. income. This requirement is a frequent focus of IRS audits in university retirement programs.

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