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Practice Management

Tech Talk: Distribution of Section 415 Notices

Q. If a client adopts a pre-approved 403(b) restatement on Nov. 15, 2018, when is the client required to distribute the new Section 415 notice to participants? Does it need to be distributed to employees by Jan. 1, 2019, or can the employer wait and distribute the notice at the end of the 2019 calendar year?

A. The requirement, which comes only from the 403(b) LRMs, indicates that the notice must be in written or electronic form and be distributed annually. The IRS makes no mention of timing, so end of the year is fine. However, remember that if there is an excess, the employer must correct in a timely manner — so probably earlier is better. Also, it depends on whether this notice will be a part of the Universal Availability Notice, which is common. In that case, the 415 notice will be sent sooner than end of the year.