Document Restatement Guide

Pre-Approved DC Plans

What you need to know about mandatory, regulatory plan document restatements?

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.

The current restatement is commonly referred to as the “Cycle 3” restatement and incorporates various law and language changes outlined in Revenue Procedure 2017-37 and IRS required changes in the pre-approved plan program pursuant to Rev. Proc 2017-41.

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.

Please contact TRA immediately for assistance in meeting these deadlines if your client’s plan has not been updated.

When does the next restatement period begin?

For DC Plans, the IRS has set July 31, 2022, as the deadline for this next restatement. 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 July 31, 2022, deadline.

Why do plan documents need to be restated?

As referenced above, as laws affecting retirement plans change, the plan adopts good-faith interim amendments to reflect those changes in order to maintain its qualified status. As the number of amendments increases, it becomes more difficult to read and understand the terms of the plan. In addition, some changes in the law may require a review of the overall plan design. These, as well as other factors, require that the plan document be restated in its entirety.

What happens if the plan document is not restated in a timely manner?

The IRS can disqualify the plan if the restatement deadline is not met. When a plan is disqualified, all of the taxable benefits to the Plan Sponsor and Participants are lost. Contributions might not be deductible, and employees cannot defer taxes on contributions.

Plan Sponsors who do not restate their plans in a timely manner may incur additional expenses to correct the failure though an IRS Voluntary Correction Program filing.

This is why restating plans on a timely basis is critical.

What does TRA charge for a plan document restatement?

For plans that utilize TRA’s pre-approved documents, the cost depends on several factors, including, but not limited to:

Further information on the cost will be provided at the time restatements are completed. When participating in TRA’s optional PDMP, Plan Sponsors will not incur a fee for mandatory, regulatory restatements and amendments and will receive a 50% discount on discretionary amendments.

Where do I get more information?

Please contact your Regional Sales Consultant (RSC) for information specific to your client’s plan and/or to learn more about TRA’s Plan Document Maintenance Program (PDMP).

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