February 23, 2010

Outside Retirement Plan Contributions Should be Reported to Vanderbilt

Do You Contribute to Another Retirement Plan?
If you do, you may need to report those contributions to Vanderbilt

Internal Revenue Service regulations applicable to the Vanderbilt University Retirement Plan, a program regulated under Section 403(b) of the Internal Revenue Code (IRC), require Vanderbilt to collect information on employee contributions made to retirement plans in that employee’s outside business.

To help you determine whether you need to report your contributions to another retirement plan, answer the following questions for 2009:

1. Are you eligible to participate in the Vanderbilt University Retirement Plan?
2. Do you own controlling interest (more than 50 percent) in a for-profit business, including a sole proprietorship and/or consulting business?
3. Do you make contributions to a qualified retirement plan  — 401(k), 401(a) and 403(b) plans, or simplified employee pensions (SEPs) and Keogh plans — through that business?

In order to be compliant with IRC 415(g) regulations, if your answers to all three questions are “yes” you must complete and return the “Internal Revenue Code Section 415(g) Aggregation Form” for 2009, which can be found at http://hr.vanderbilt.edu/forms/documents/Section.415.Aggregation.Form.pdf.

Drop off the completed form to HR Express, 2525 West End Ave. on the second floor, or mail it to:
Attn: Section 415
Benefits Administration
PMB 357700
2301 Vanderbilt Place
Nashville, TN 37235-7700

It is your responsibility to report outside contributions to Vanderbilt to avoid the risk of penalties due to inappropriate withholding. The tax consequences of noncompliance are potentially very severe. The full value of your Vanderbilt account and the account of your outside plan may be taxed and these taxes may include civil and criminal financial penalties.

This information must be collected and used for IRS ‘contribution limit testing’ by Vanderbilt University (as plan sponsor) in order to monitor compliance with applicable limitations. More information on these limits imposed by the IRC 415(g) is available at the IRS Web site: http://www.irs.gov/newsroom/article/0,,id=174873,00.html.

Contact your tax adviser for more information and help with completing the required form.

The Office of Benefits Administration is legally not able to provide tax advice or retirement contribution assistance.

For information on the Vanderbilt Retirement Plan, contact benefits@vanderbilt.edu.