Pension Fund of the Christian Church

If the answer to the above question is "yes," then your congregation or church related organization must comply with the Regulation's special coordination requirements for multiple 403(b) arrangements. Such rules are very complex and require much more involvement by an employer in preserving the favorable tax status of its 403(b) arrangements. Uncoordinated and disparate individual 403(b) contracts covering the same or different groups of employees make it very challenging for a congregation to determine whether the Regulations are met, especially if an employee has contributed to more than one arrangement in a given year and whether the legal limitations on loans and hardship withdrawals will be satisfied. We strongly encourage you to utilize the Pension Fund as your sole source for 403(b) accounts for your employees for contributions after January 1,2009.

Starting January 1, 2009, it will be necessary to keep track of all of an employee's 403(b) plan transactions on an aggregate basis. This means that elective deferrals, plan loans, hardships and annual additions under Section 415(c) of the Code will have to be monitored across all of an employer's 403(b) arrangements. The Regulations require that one entity must be charged with plan administration and coordination between the multiple 403(b) arrangements, which includes (but is not limited to) monitoring these types of transactions to ensure compliance with applicable legal limits and rules.

The Pension Fund monitors these items for the Pension Plan and TDRA, such as tracking contributions made to these programs to assure that participants do not contribute excess amounts to their accounts. However, when a particular congregation or church related organization has multiple 403(b) vendors as discussed above, it, as the employer, will generally be charged with coordination and plan administration duties unless it specifically allocates such responsibilities to a third party administrator.

For 2008, the limit on elective deferrals is $15,500 plus $5,000 for age 50+ catch-up contributions. Loans (including any outstanding balance within the last 12 months, which includes any defaulted loans) are limited to the lesser $50,000 or 50% of a participant's total account balances.

The following example illustrates coordination requirements for multiple 403(b) arrangement:

The Regulations require that aIl403(b) arrangements have a legally compliant plan document. While the Pension Fund maintains 403(b) plan documents in accordance with the Regulations, which cover participating congregations and church related organizations and their eligible employees, a church employer that sponsors multiple 403(b) arrangements will need to have its own 403(b) plan document to reflect all 403(b) vendors. A 403(b) plan document is a legal document that is subject to complex technical rules, and therefore as you maintain multiple 403(b) arrangements, you should contact your attorneys and/or 403(b) plan issuers for assistance with this process.

Once a plan is established and a proper plan document is prepared, an operational failure may result if the plan terms are not followed. Failure to maintain a legally compliant plan could result in plan disqualification, penalties and taxes imposed on the congregation or church related organization, and taxation of all employees who made tax-cleferred contributions before the amounts are distributed from the plan and impose related tax reporting and other obligations.