On July 23, 2007, the Internal Revenue Service(IRS) issued final comprehensive regulations govering 403(b) plans for the first time in 43 years. The general effective date of the regulations was January 1, 2009.
A summary of the regulations may be found here: Summary of Final 403(b) Regulations
As a result of the new regulations, the University of Hawaii and National Benefit Services, LLC will be required to become more involved than previously in the administration of your 403(b) plan.
In the past, transactions such as distributions, rollovers, hardship withdrawals, loans, and exchanges were generally accomplished through your investment provider without any involvement of your employer. However, the new regulations now require your employer and your investment provider to share certain information and to coordinate with each other when performing these transactions. A transaction authorization process will be utilized in order to facilitate necessary coordination and information sharing. If you wish to perform a distribution, rollover, hardship withdrawal, loans, or exchange; your investment provider must receive authorization from NBS. Authorization is obtained through submission of an Authorization Form. Please note that in addition to the Authorization Form, your investment provider will likely still require submission of its own paperwork. Contact your investment provider for additional information.
How does the transaction authorization process work?
If you wish to initiate a distribution, rollover, hardship withdrawal, loan, or exchange between investment providers you should complete the following steps:
- Download the appropriate Authorization Form
- Complete the Authorization Form and attach any appropriate documentation. Instructions on the Authorization Form will indicate what documentation, if any, is required.
- Fax or mail the Authorization Form to NBS. The address and toll-free fax number are included on the form.
- Complete any other paperwork required by your current investment provider (contact your provider for details). Your current investment provider will likely still require submission of its own paperwork in addition to the Authorization Form. The Authorization Form does not instruct your provider to perform a transaction—it authorizes the provider to perform the transaction you request.
NBS will review the Authorization Form to ensure the transaction is in compliance with plan provisions and the Internal Revenue Code. If the transaction is authorized, NBS will notify your current investment provider (the provider that currently holds your 403(b) assets). If the transaction cannot be authorized or if additional information is required, NBS will contact you.
Transactions formerly known as "90-24 Transfers" have been affected by the new IRS regulations. An exchange is the movement of 403(b) money from one investment provider to another while you are still employed by your employer. You may only exchange plan 403(b) assets to an investment provider that has established an information sharing agreement with your employer or NBS. Investment providers that have established an information sharing agreement are classified "Exchange Eligible." A current list of Exchange Eligible providers can be found on your employer's page within this website.