Frequently Asked Questions

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

• Copies of notices
• List of employees notified
• Record of whether notification was mailed or emailed
• Data proving meaningful notice was provided to all employees

Universal Availability refers to the requirement that all eligible employees be given an opportunity to participate in your 403(b) Plan.

Notice of eligibility must be provided at least annually.

To add a new vendor to your approved provider list, the vendor generally needs to execute an Information Sharing Agreement to provide AFPlanServ information about participant accounts. Your Plan document must also be updated when you add a new vendor.

To add a new vendor to your list of providers, please contact us. 

To obtain a list of approved providers for your Plan, please contact us. 

If you would like to change the way your Plan operates (for example, change eligibility, add employer contributions, allow loans, etc.), your Plan document needs to be amended. The amendment must be executed by you before the end of the Plan year in which you make your operational change. 

To make changes to your Plan document, please contact us. 

Yes, the SRA authorizes you, the Employer, to withhold a specified amount of compensation from an employee’s paycheck on a pre-tax or after-tax basis (if Roth or other after-tax contributions are allowed by the Plan) and to send the contribution to the provider that they have indicated.

This form is required for all employees for whom a 403(b) and/or 457(b) contribution is being deducted. Deductions cannot be remitted without an approved SRA from AFPlanServ. Without proper documentation, AFPlanServ cannot monitor contributions for compliance with IRC requirements. Retained copies of Participant SRAs should be retained indefinitely.

Part of what we do to help keep you compliant is monitor yearly contributions for each participating employee. However, we cannot do this without your assistance and without properly completed SRAs. This also helps to ensure that contributions are only sent to your approved providers. These SRAs may be faxed to our office at 866-578-0962.

To help ensure that contribution amounts do not exceed Internal Revenue Code annual contribution limits, AFPlanServ works with you to monitor employee contributions. This helps lower the risk of excess contributions and allows for corrective action to be taken as soon as administratively possible.

We receive information from your approved providers monthly, including Participant contributions. If a Participant is found to have contributed more than the annual limit, we will notify the Participant, the provider who received the contribution, and you.

If an excess contribution is identified after the calendar year's end, we will notify you and the provider, and a corrective distribution will be processed to the Participant.

The 403(b) and 457(b) are not aggregated. Therefore, an employee may simultaneously contribute the annual contribution limits into each Plan, not to exceed 100% of their compensation. 

Yes, under certain circumstances.

Permissible distributions:  

• Participant reaches age 59 ½
• Participant Retires or ends employment
• Participant is permanently disabled
• Upon death of the participant
• Qualified reservist 
• Qualified birth or adoption 
• Emergency Savings
• Domestic Abuse Survivor
• Qualified Disaster Recovery

Generally, Plan distribution amounts are fully taxable as ordinary income. Distributions are subject to a mandatory federal tax withholding of 20% and may be subject to a mandatory state withholding tax. Verify with your provider prior to distribution to see how and if the distribution will be taxed. 

If a distribution is taken from a Plan before age 59 ½, a 10% additional tax penalty may apply to the taxable amount received.

You must deposit salary reductions as soon as administratively feasible after deducting the money from employee wages. The Internal Revenue Code rules state that in any event, contributions cannot be deposited later than the 15th day of the month after the contributions were deducted from the employee's wages.

Contributions to a 403(b) or 457(b) Plan may be deducted pre-tax or after-tax (Roth), based on the Participant's choice and what the Plan(s) permit.