Nonprofit Advisor ▲

UHY Advisors Mid-Atlantic, Inc.

June 2008
Vol. 1 • No. 4

▲
6851 Oak Hall Lane Suite 300 Columbia, MD 21045 410-720-5220 Fax 410-381-2524 www.uhy-us.com

Watch out! 2008 Form 990

Best Practices Series
Your 403(b) Plan Rules
are Changing Conflict of
By Debbie Crown, Senior Manager Interest Policy
T here have been
some import-
required terms and conditions
under that plan. A written plan doc-
By Matt Duvall, Senior

ant revisions made

to the regulations
governing 403(b)
retirement plans.
Most of these
changes will take
Debbie Crown place for plans
with tax years beginning after
December 31, 2008, but these changes
can be made prior to that date.
403(b) plans covered under the
Employee Retirement Income Secu-
rity Act of 1974 (ERISA) will now be
subject to the same reporting and
audit requirements that currently
exist for section 401(k) plans. This
means that ERISA-covered 403(b)
plans with 100 or more participants
will be required to file audited
financial statements beginning with
their 2009 Form 5500 filing. 403(b)
plans with fewer than 100 partici-
pants may be eligible to use new
abbreviated reporting forms with-
out audited statements.
In addition, non-ERISA-covered
403(b) plans will have to have a
written defined contribution plan
which satisfies 403(b) in both form
and operation, and contains all the
ument is defined as a written
defined contributions plan which
satisfies certain provisions in form
and operation. These provisions
would include: terms and condi-
tions for eligibility, contributions
and applicable limitations, form and
timing of distributions, contracts
available under the plan, responsi-
ble party for administration and
compliance of the plan, and option-
al plan provisions, such as loans or
hardship withdrawals.
As with ERISA-covered plans, non-
ERISA plans must meet the contri-
butions rules that require the funds
to be transferred to providers within
a period no longer than is reason-
able for proper plan administration.
If your plan is not an ERISA plan,
then you should evaluate your cur-
rent payroll processing to ensure
that elective deferral contributions
are remitted in a timely manner.
Some changes to note include:
• The rules relating to elective
deferrals for 403(b) purposes have
been limited.
continued on page 2
In our February
2008 newsletter,
I discussed the
release of the 2008
Form 990 and the
IRS’ three goals of
1) increasing the
transparency of
Matt Duvall filing organiza-
tions to the public, 2) increasing
compliance with government regu-
lations and 3) decreasing the overall
filing burden.
continued on page 2
WE HAVE YOUR
FINANCIAL SOLUTIONS
UHY has a full staff of account-
ing professionals who can pro-
vide excellent support to your
accounting department. If you
need to supplement your staff
with accounting clerks, book-
keepers or experienced CPAs,
just call us and we’ll help.
We also provide consultation
services, design of internal
controls, operating procedures
and accounting systems.

UHY Advisors brings specialists in nonprofit solutions in accounting, audit and tax.

Your 403(b) Plan Rules
are Changing
continued from page 1
• No longer can incidental life insur-
ance be part of a 403(b) plan.
• These plans may terminate and
distribute assets with full rollover
ability, as well as recognize sever-
ance where an employee no
Conflict of Interest Policy
continued from page 1
Over the next several newsletters, I
will be providing guidelines and
resources you can use to help meet
the IRS’ goal of increasing trans-
parency and compliance. I can’t,
however, promise that this informa-
tion will help reduce your filing bur-
den, but two out of three isn’t bad!
First, let’s start with taking a look
at the importance of a written conflict
of interest policy. A conflict of interest
policy defines conflicts, identifies the
classes of individuals within the
organization covered by the policy,
facilitates disclosure of information
that may help identify conflicts of
interest, and specifies procedures to
be followed in managing conflicts
of interest.
A “conflict of interest” arises when a
person in a position of authority
over an organization, such as an offi-
cer, director, or manager, may bene-
fit financially from a decision he or
she could make in such capacity.
In addition to asking whether the
organization does in fact have a
written conflict of interest policy
(already a question on the old Form
990), the 2008 Form 990 asks these
additional questions:
UHY Advisors, Inc., provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc.,
and its subsidiary entities offer services from offices across the United States. UHY Advisors, Inc., and its subsidiary entities are not licensed CPA firms.
UHY LLP is a licensed independent CPA firm that performs attest services. UHY Advisors, Inc., and UHY LLP are independent U.S. members of Urbach Hacker Young International Limited.
longer works for the employer eli-
gible to maintain a 403(b) plan.
• Employer contributions and
employee after-tax contributions
must satisfy the nondiscrimination
requirements in the same manner
as qualified plans.
• There are fewer exceptions for
excluding employees from partici-
pation in 403(b) plans.
• Are officers, directors, or trustees
and key employees required to
disclose, annually, interests that
could give rise to conflicts?
• Does the organization regularly and
consistently monitor and enforce
compliance with the policy?
The last question is the reason I can’t
promise a reduced filing burden. If
you answer “yes,” you are required
to explain in narrative form how
your organization monitors and
enforces compliance. The narrative
should include an explanation of
which persons are covered under
the policy, the level at which deter-
minations of whether a conflict
exists are made, the level at which
actual conflicts are reviewed and
any restrictions imposed on persons
with a conflict of interest.
Need help getting your organization
ready for the new Form 990?
We can help with training for
staff and boards.
Call Jennine Anderson at
410-720-5220, or email her
at janderson@uhy-us.com.
June 2008
Vol. 1 • No. 4
This quick summary is not all inclusive,
but it should give you an idea of the
massive changes that have been made
to the 403(b) retirement plan regula-
tions. We have always recommended
that employers seek experienced and
qualified guidance related to the bene-
fits provided to employees. Make sure
you get started now on ensuring your
organization plan is up-to-date and that
you comply with all requirements.
If you think your organization’s con-
flict of interest policy could benefit
from some rejuvenation, or if you’re
just getting started on developing
this best practice, you’re not on your
own. The IRS has made a sample
conflict of interest policy available on
its website, and Independent Sector
also provides helpful insights on the
necessary components to include.
Here are some links
to these resources.
IRS Sample Conflict of
Interest Policy
http://tinyurl.com/6jnp6l
Independent Sector Conflict
of Interest Guidelines
http://tinyurl.com/6lund7