The What, When, Why and How of Restating Plans

1/8/2014

WHAT

• Restating is the process of incorporating all interim legislative and regulatory changes that have occurred since the last restatement

• IRS requires periodic restatements of qualified retirement plans to ensure all changes either discretionary or mandatory are included in the plan document

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WHEN

• IRS created a systematic six year cycle

• Last restatement window for EGTRRA was May 1, 2008 – April 30, 2010

• Upcoming restatement for defined contribution pre-approved plans is April 1, 2014 – April 30, 2016

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WHY

• Required by IRS to keep plan in compliance (even if plan is terminating)

• Repercussions:– Loss of deductibility of employer contributions to

the plan– Employee’s vested account balances would

become immediately taxable– Trust would lose its tax-exempt status and become

a taxable trust

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WHY

• Task OR Opportunity???• Confirm that the plan document matches how

plan is being operated• Identify whether changes are necessary going

forward• Enhance plan design to be more in line with

client’s objective

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HOW

• Action items for the client:Recommend an attorney to review the plan, if

wishesMarked pages to the plan has to be signed prior to

April 30, 2016 to be in complianceReturn signed pages to your plan administratorDistribute new summary plan description to plan

participants

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