Eligibility Notifications

The Internal Revenue Code (IRC) requires 403(b) Plans to meet Universal Availability Requirements. To meet these requirements, employers generally distribute an eligibility notice at least annually to eligible employees. The IRC suggests that notification be sent in the same manner as other important correspondence. AFPlanServ® will provide a sample notice to employers to help satisfy Universal Availability requirements.

Employers should maintain written procedures for distributing eligibility notices. This could include:

• Copies of the notices provided
• Lists of employees notified
• If notification was mailed or emailed
• All data relevant to show meaningful notice was provided to all employees

Requirements

All eligible employees must be provided the opportunity to enroll in the 403(b) Plan or change their contribution level at least once a year. Communication of eligibility to all employees is a main focus of IRS audits. We will help provide notification language annually and are available to answer any questions you may have.

The notice must include:

• When employees may make elective deferrals
• How an employee can change an election and how often elections may be changed