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403(b) LIMITS FOR 2008

There will be no change in the 2008 elective limitations for 403(b). The following are the dollar limits for the year 2008, as per the Economic Growth and Tax Relief Reconciliation Act of 2001:

• The elective deferral limit for an individual’s 403(b) contribution is increased to the lesser of 100% of salary or $15,500 in 2008.
• Individual’s age 50 or older will be permitted to make an “additional” contribution above and beyond the statutory limit. The elective deferral limit for these individuals 403(b) contribution is the lesser of 100% of salary or $20,500 in 2008.
• The $3,000 per year Catch-up Provision for employees remains the same when meeting these conditions:
  • 15 or more years of service within the current school district
  • The employee has NOT averaged over $5,000 per year of elective deferrals
  • The lifetime cumulative catch-up allowed remains $15,000

Click here for a Word Document illustrating of the limits.

If there are any questions about the 2007 limits please contact us.

IRS Releases Final 403b Regs

The IRS released Finalized 403(b) Regulations Monday, July 23, 2007. The regulations were released with an effective date of July 26, 2007 and an applicable date for tax years beginning after December 31, 2008.

To clarify the applicable date is the key date of focus. The regulations and changes brought about by them will need to be in place January 1, 2009. There are several exceptions within the regulations that will have later applicable dates.

The OMNI Group over the next eighteen months will provide the guidance and tools school districts will need to be prepared for January 1, 2009. OMNI and our legal counsel will review the regulations. Through that process OMNI will put together an action plan for what will need to be addressed.

There will be those offering well-meaning advice. As the district’s Compliance Specialist OMNI is your guide through the next eighteen months so that your district’s plan will be in compliance with the regulations that become applicable January 1, 2009 and beyond.

Please do not hesitate to contact OMNI, 877-544-6664, with any questions, concerns or suggestions you may have as we all move towards January 1, 2009.

To view the final regulations please go to the following link: http://www.ustreas.gov/press/releases/reports/td%2093403_checked_.pdf

CalSTRS Selects Omni as Third-Party Administrator

The California State Teachers’ Retirement System has selected The Omni Group to oversee the administration and compliance of their tax-sheltered annuity program. This program was developed for school districts, county offices of education and community colleges to ensure compliance with the new IRS 403b retirement plan regulations.

IRS Expands Universal Availability Program Throughout U.S.

The Internal Revenue Service announced on June 21st that it is expanding its outreach effort to ensure that public schools throughout the United States are complying with the universal availability requirement for retirement annuities they may offer.

Click here to read the IRS announcement

Proposed 403(b) Regulations released by the IRS

The IRS has released for the first time in over 40 years proposed regulations regarding 403(b) plans. The proposed regulations will be undergoing a comment period that could last between twelve to eighteen months before any regulation becomes finalized.

The Omni Group will continue to follow the progression of these regulations and be available to offer comment and guidance when necessary. You may read through the proposed regulations by clicking on the following link

http://www.treas.gov/press/releases/js2099.htm.

Proposed 403(b) Regulations Update

As they say: “No news is good news,” which is the case regarding the 403(b) regulations proposed in November 2004. When the regulations were released they were done so with a target effective date of January 1, 2006.

To reach that point the IRS/Treasury Departments first have to move the regulations from a state of Proposed Regulation to Finalized Regulations, this has not occurred. The new target effective date from the IRS/Treasury Departments is January 1, 2008, based on a tentative release of the Finalized Regulations during the second quarter of 2007.

Omni has seen and heard of communication being forwarded over the months to districts, mostly by investment providers. The regulations in their current state are not to be relied on. Any communication stating otherwise is strictly speculation or opinion.

The role of Omni, as your Compliance Specialist, is to supply the district with news to be acted on and not speculation. You can be assured that, when actionable news occurs regarding the 403(b) regulations, we will be the first to notify you and have an action plan in place so that the district’s 403(b) administration can move forward under the new regulations.

The Omni Group is available toll free at 1-877-544-6664 for any questions regarding 403(b) plans and your district.

Omni presenting at 94th ASBO Annual Meeting

Rodney Williams, President and Director of National Sales & Marketing for the Omni Group will be speaking at the 94th ASBO annual meeting being held in Denver, Colorado from November 7-10, 2008. This marks the ninth year that Rod has addressed business officials from across the nation. Please stop by and visit our booth.