Plan documents are drafted based on laws and regulations set forth by Congress, the Treasury Department (IRS), and the Department of Labor. As those laws and regulations change, qualified plan documents must be updated to reflect those changes in the law.
Every six years, the IRS requires that all prototype and volume submitter documents be updated and resubmitted for IRS review and approval. Upon approval, each plan sponsor using a prototype or volume submitter document must amend/restate onto the new plan document. Existing plan documents not on the new Cycle 3 prototypes will be considered out of compliance once the restatement period has ended July 31, 2022, even if they have only had the plan for a couple of years or less.
The deadline for the last mandatory restatement was April 30, 2016, but it was based on documents approved by the IRS in 2014 and only considered legislative/regulatory updates through 2010. Since then, there have been more than several regulatory and legislative changes impacting retirement plans, including, but not limited to:
Rules expanding In-Plan Roth Conversions of otherwise non-distributable amounts.
Final regulations providing for a limited modification of the required minimum distribution rules for tax-qualified defined contribution plans holding Qualifying Longevity Annuity Contracts.
Clarifying change relating to the application of same-sex marriage rules.
Final regulations providing guidance on mid-year changes to Safe Harbor 401(k) Plans.
Qualified Natural Disaster Relief provided by the IRS, including, but limited to, Louisiana storms, Hurricane Matthew, Hurricane Irma, Hurricane Maria, and California Wildfires.
Revised disability claims procedures as provided by the Department of Labor (DOL).
New rules extending the rollover period for Qualified Plan Loan Offset Amounts.
Since most plan sponsors are required to get new documents, so this is also a great time to make optional changes to a plan. Has your company gone through changes? Are you considering revising how your plan works? Farmer & Betts is happy to review your current plan design for you. Please contact us, we are here to help!
The Farmer & Betts team offers the highest level of pension plan expertise and service, as well as an ERISA attorney on staff and an experienced compliance department. We are happy to support you with specialized plan design and competitive fees. Contact us by email or by phone at 888-565-9887 to learn more.