What Has Last Summer’s Tax Bill Done for Public Pension Plans and What Opportunities Has It Created?
Robert J. Architect
Senior Tax Law Specialist
Internal Revenue Service

A senior tax law specialist with the Internal Revenue Service (IRS), Bob Architect, discussed the effects of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) on public sector funds.

Architect explained how EGTRRA presents great opportunities for increased retirement savings by public sector employees. Most states have already complied with the new legislation; however, nine states have yet to amend their programs to take advantage of the higher pension contribution limits.

Architect reviewed the essential components of the law, focusing on specifics as they relate to 403(b) and 457 plans. He reviewed details of maximum exclusion allowances, elective deferrals, disaggregation of multi-plan limits, maximum deferral units and catch-up contributions.

Architect offered several sources for additional information on EGTRRA and related issues, both for pension administrators and public sector employees:

• For 403(b) plan administrators, the IRS has issued a new Publication 571. Updated in January 2002, the publication addresses tax shelter annuities.
• To continuously receive employee plan news, subscribe to a new IRS email service. To join, visit the IRS’ Retirement Plans Site (www.irs.gov/ep).
• A new CD, Publication 3767, will be available in May. It will be a compendium of information on 403(b) and 457 plans. There will be information for the layperson and technical details of interest to plan administrators. To order free copies of the CD, visit the IRS website (www.irs.gov/ep).
• Next month the IRS will also publish new 457 plan regulations that have been under review for several years. The regulations will include changes required because of EGTRRA.

Architect has been with the IRS since 1975, specializing in 403(b) plans. He is a member of both the New York and District of Columbia Bar Associations.