If you are an employer who sponsors a qualified retirement plan, we want to remind you about the requirement to restate your plan document.  Many retirement plans that use plan documents preapproved by the Internal Revenue Service (IRS) must be restated periodically to reflect recent legislative and regulatory changes, in order to maintain their tax qualified status.  Restating means completely rewriting the document.  Called “Cycle 3” or “Post-PPA”, the latest IRS-announced restatement cycle for pre-approved defined contribution plans began August 1, 2020, and will end July 31, 2022.  Plan restatements are required by the IRS and are not optional.  (If your plan is a defined benefit plan or a 403(b) plan, those plans have different cycles and are not part of this restatement.)

Restating a qualified retirement plan means revising the plan document to include provisions that were part of new laws passed since the last restatement cycle.  Retirement plan changes included in recent laws, such as the SECURE Act and CARES Act, are not part of this restatement and so separate “good faith” amendments may be necessary to incorporate certain provisions offered by those laws.

In addition, restating a qualified retirement plan gives you as an employer and plan sponsor an opportunity to make some changes that will make your plan even better (and more valuable) for you and for your employees.  Talk with your TPA about possible revisions and improvements to your qualified retirement plan.

You may have already heard from your document provider about this requirement and their process for completing the restatement.  If you are considering terminating your qualified retirement plan, it must be updated to comply with all required law changes; so restatement may be part of the legal plan documentation required for the plan termination process.

If you sponsor a qualified, pre-approved plan, such as profit-sharing plan or a 401(k) plan, communicate with your document provider or Third Party Administrator (TPA) to confirm that your document has, or will be, restated by July 31, 2022.  This restatement is mandatory, with possible penalties for non-compliance.

As always, your JMF PC team is here to provide support for you during these rapidly changing times. If you have questions about restating or administering your qualified retirement plan, please do not hesitate to contact us.