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September 2, 2015

Retirement Plan Document Restatement

By: Larry A. Ruff, CPA, MBA

All defined contribution plan documents (including 401(k), profit sharing, and money purchase plans) must be restated no later than April 30, 2016 to incorporate the language and provisions from the Pension Protection Act (PPA) of 2006, and various other required amendments that took effect between 2007 and 2011.  This restatement impacts any plan sponsor that uses a pre-approved plan document.  In other words, it does not apply to an individually designed plan document.

You may have already received and completed new plan documents from your financial institution, document provider or plan administrator to update your plan.  If you have completed this process and signed your documents, no action is required now.

However, if you have not yet received new plan documents, or did, but have not updated them, now is the time to get them updated before running against the April 30 deadline.  And, if you have a safe harbor 401(k) pre-approved plan you will need to act even quicker.

Safe harbor may generally only be restated or amended before the beginning of a plan year.  Safe harbor plans are also required to provide an annual notice to plan participants 30 to 90 days before the beginning of a plan year.  Because the restated safe harbor plan may impact the annual participant notice requirement, you will need to have your plan restatement completed no later than the end of the notice period.  For calendar year safe harbor plans, this means that you must complete your restatement no later than December 1, 2015.

Remember, if you fail to get your plan document restated by those dates, you risk your plan’s tax qualification.  Untimely update of your plan document also means that you would need to correct this through the IRS Voluntary Correction Program to get back your plan qualification including the payment of a fee.  This would be a costly mistake for you, so take action now to get your plan updated.

If you work with a document-provider organization and have not yet received plan documents, contact them to find out when you may expect this information.  ORBA can also help you get your retirement plan restated.  If you have any questions or need assistance with the plan restatement contact your director or benefits specialist at ORBA.