Retirement service provider OneAmerica is offering a friendly reminder to plan sponsors in the nonprofit sector who have yet to comply with a looming Internal Revenue Service (IRS) administrative deadline.
Tax exempt organizations (other than designated church plans) have until March 31, 2020, to adopt a pre-approved prototype document to ensure consistency and compliance. OneAmerica has found that transferring and reviewing the data to adopt the IRS plan, a process known as restatement, typically averages at least 15 or more hours of labor for each plan sponsor.
Kevin Kidwell, vice president of national tax exempt sales at OneAmerica, has spent much of 2019 sounding the warning bell to nonprofit leaders about the importance of restatement. As a participant in various panels, including the PLANSPONSOR 2019 national conference panel1, Kidwell said he believes the IRS restatement is a blessing, not a burden.
During this remedial amendment period, or restatement period, understanding how your plan is operating versus how the plan was written and designed is a required conversation, Kidwell said. Actual practice has strayed from the original draft, and most plans have some sort of defect they need to clean up. Theyve got three months left to do this, and the clock is ticking.
This issue is an important one to customers of OneAmerica, which has focused on serving the tax exempt market since the mid-1960s. Of 26 tax exempt providers profiled in the 2018 PLANSPONSOR 403(b) Buyers Guide in terms of plans served by industry, OneAmerica ranked 1st in social and community service organizations, 4th in charitable organizations, 6th in religious organizations, and 6th in hospital/healthcare2.
Tax exempt business is in our DNA. Many of our longest-tenured clients are nonprofit organizations, said Sandy McCarthy, president of retirement services at OneAmerica. Our seasoned team is experienced in serving tax-code neutral plans and delivering customized solutions that allow these mission-oriented, client-focused organizations to help their participants on their paths to retirement.
Sponsors are welcome to contact the OneAmerica sales desk at 813-812-0133 for additional assistance.
OneAmerica is the marketing name for the companies of OneAmerica. Products issued and underwritten by American United Life Insurance Company (AUL), a OneAmerica company. Administrative and recordkeeping services provided by McCready and Keene, Inc. or OneAmerica Retirement Services LLC, companies of OneAmerica which are not broker/dealers or investment advisors.
A national provider of insurance and financial services for more than 140 years, the companies of OneAmerica help customers build and protect their financial futures. OneAmerica offers a variety of products and services to serve the financial needs of their policyholders and customers. These products include retirement plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by the companies of OneAmerica and distributed through a nationwide network of employees, agents, brokers and other sources who are committed to providing value to our customers. To learn more about our products, services and the companies of OneAmerica, visit oneamerica.com/about-us/companies-of-oneamerica.
_____________________________ 1https://bit.ly/OA_403b_remediation 2 Information obtained from https://www.plansponsor.com/research/2018-403b-buyers-guide/
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