Cycle 3 Restatement Guide
What do I need to know about restating my plan document?
The Internal Revenue Service (IRS) and Department of Labor (DOL) require all qualified retirement plans to encompass certain provisions in order to satisfy applicable Internal Revenue Code laws. As a general rule, plan sponsors using a pre- approved plan document must restate their plan every six years to incorporate law changes, procedural changes and discretionary amendments that have been adopted since the last restatement.
Since the restatement requires amending your plan document in its entirety, The Retirement Advantage, Inc. (TRA) is providing the following information to help you understand the process.
What is the restatement deadline?
Based on IRS Announcement 2023-6, the restatement deadline is March 31, 2025. As the IRS recently issued approval letters for TRA’s pre-approved documents, we will restate your plan in its entirety no later than the March 31, 2025 deadline.
What will change in my plan document?
This restatement takes the language from your current Pension Protection Act (PPA) document and includes new laws added by Congress and IRS procedural changes issued as noted in IRS Announcement 2020-14.
What happens if I fail to restate my plan on time?
The IRS can disqualify your plan if you fail to meet the deadline for restatement. This means all of the taxable benefits to you and your employees are lost, contributions might not be deductible and the employer cannot defer taxes on contributions. This is why restating your plan on a timely basis is critical.
Should I consider changes to my plan design?
Your plan’s provisions should be reviewed regularly to ensure they meet your goals and objectives. As such, now is the time to consider adding or changing plan provisions as part of the restatement process.
What are the benefits of TRA’s restatement process?
- Simplified restatement process
- Assurance that your plan remains in compliance
- Allowance for modifications to your plan’s provisions; and
- Avoidance of IRS/DOL fees and penalties
What will TRA’s restatement package include?
The restatement package will include:
- Restated plan adoption agreement;
- Cycle 3 underlying plan document;
- Summary Plan Description (SPD).
Conclusion
TRA appreciates the opportunity to serve you, and we hope this information helps you understand when and why your plan must be restated. You will be provided with additional information on the restatement process in the coming months.
