IRS pending regulations seen as consolidating 403(b) market; Providers jockey for position in anticipation, industry observers say.(News)

Investment News, April, 2007

Byline: Lisa Shidler CHICAGO - The IRS plans to issue final regulations for 403(b) plans by the end of June, and the changes could result in industry consolidation, particularly in the K-12 marketplace, observers said. As a result, smaller advisers and providers may exit the business, while major players may have to work harder to win the 403(b) business and to retain accounts, industry observers said.

The regulations represent the first significant change in 403(b) plans in 40 years, and they are meant to make the antiquated plans more like 401(k) plans. The proposed changes would, for the first time, require 403(b) plans to have written guidelines, which would be the responsibility of the employer, but advisers would have to answer...

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