Posted on December 10, 2020
With regard to current suppliers, according to Segal Blinn, the IRS submitted a standard language project for the exchange of information as part of the 2007-71 reference procedure; Plan sponsors must rank the conditions for exchanging information in the plan document. If the lender is no longer a licensed borrower for the plan, sponsors must continue to request the exchange of information and have a formal disclosure document. The rules on the exchange of information apply to credits in case of difficulties and when a participant starts working. Segal Blinn says, especially in the field of education, that employees who retire are rehired after the fact. So with distributions, tarpaulin sponsors and suppliers want to make sure they don`t distribute money to someone who no longer has a distributable event because of the separation of employment. And the agency will face directly suppliers who have not accepted the exchange of information, warned Linda Segal Blinn, vice president of technical services at ING, in a webcast sponsored by the National Institute of Pension Administrators. The IRS is also for orphan contracts that were revoked from 2005 to 2008. Plan sponsors should try to exchange information in good faith (see “Ask the experts – information exchange agreements”). Segal Blinn says the best practice is to have a formal agreement on the exchange of information, but sponsors should at least go to these suppliers to ensure that the limit values are not exceeded. Segal Blinn explained that the IRS was very concerned about 403 (b) participants who did not exceed credit and distribution limits, so the regulations adopted in 2007 required suppliers to share information with plan sponsors. If an employee asks for a loan from a borrower. B, he must check with the plan sponsor if the employee has loans with other creditors that may lead him to exceed the IRS credit limit.