- The IRS says the Fort Mill School District has to change the way an optional retirement savings plan is offered to employees by Jan. 1 or do away with it.
Meetings will be held with all district employees Tuesday, Sept. 16 to explain the changes to the savings plan known as a 403-B, which is similar to a 401k. The district has been working with Corporate Benefits of Greenville to find a suitable, third-party company to administer the program.
"The IRS and the [Department of Labor] have looked into the 403-B plans and have found 100 percent of them are out of compliance," CBI consultant Shane Birkbichler said to board members during a meeting Monday night.
All state employees, which includes school district employees, are automatically enrolled in the state retirement plan and may also have a 401k or 457 (another pretax retirement account) through the state as well. The 403-B plans have never had state oversight, and have always been run by private vendors, Assistant Superintendent Leanne Lordo said.
Currently, 14 vendors offer 403-B plans to district employees, all of which have similar if not identical investment portfolios, Birckbichler said. He recommends the district reduce the number of vendors. He is also recommending the district hire a third party to administer the accounts because ensuring the program remains in compliance with tax laws would require a full time staff member to manage the program. Currently, 249 teachers have the accounts.
The district also needs to make sure every employee is aware of the program's availability. Until now it had been left up to the individual vendors to contact employees to offer the accounts, which is one of several noncompliance issues the federal agencies found in the 403-B accounts nationwide.