When does your plan document need to be restated?

Plan documents are drafted based on laws and regulations set forth by Congress, the Internal Revenue Service and the Department of Labor.  As those laws and regulations change, documents must be updated to reflect those changes.  The deadline for the last mandatory plan document restatement was April 30, 2010 but, it was based on documents approved by the IRS in early 2006.  Since then, there have been a number of regulatory and legislative changes impacting retirement plans, including but not limited to the following:

-Regulations dealing with post-severance compensation (Section 415 regulations)

-Pension Protection Act of 2006 (“PPA”)

-Heroes’ Earnings Assistance and Relief Tax Act of 2008 (“HEART”)

-Worker, Retiree and Employer Recovery Act of 2008 (“WRERA”)

A restatement is a complete re-writing of the plan document.  It incorporates changes from any plan amendments that may have been adopted since the last time the document was re-written.  Failure to complete the current plan restatement by the April 30, 2016, deadline will jeopardize a plan’s tax-qualified status.

Most employers do not need to apply for a separate IRS determination letter for a pre-approved plan.    An employer that adopts a master & prototype plan may not apply for its own determination letter.  Instead, the employer should rely on the opinion letter issued for the pre-approved plan.