Resources

What is a plan restatement?

A restatement refers to the complete re-writing of the plan document in order to incorporate any legislative changes and amendments that may have been adopted since the last time the document was re-written.

Why do we have to restate our plan?

It is IRS policy to require restatements for pre-approved plans every 6 years or cycles.  The current restatement of defined contribution plans is being referred to as the Cycle 3 or “Post PPA” restatement. This restatement will incorporate any recent legistlative and regulatory changes that have occured since the last time the document was updated. 

What is a Pre-Approved plan?

A pre-approved plan is one that the IRS has reviewed and approved all of the plan provisions that are available.  Jim Hallinan Pension Consulting uses IRS Pre-approved Documents in order to minimize the cost of preparing a plan document for our clients and to maximize flexibility to design plans. 

Is the restatement mandatory?

Yes.  Not restating your plan could result in penalties for non-compliance and jeopardize the plan’s tax qualified status.

What is the process and deadline for restating the plan documents?

Defined Contribution plans must be restated by July 31, 2022.  We will be reaching out to our plan sponsors over the next few weeks to begin the process.

We just started our plan. Do we need to restate our document?

In most cases, yes. The Cycle 3 Restatement Document was recently approved.  As a result, some newly- established plans may need to be restated.

Can we make changes to our plan during the restatement process?

Yes.  The restatement process presents the opportunity to redesign the plan to better meet your needs.  It is an excellent time to review provisions for loans or hardships, adjust the plan’s contribution rules or make other plan changes.

Can we pay for the restatement from the plan?

Yes.  Since the restatement is required, the Department of Labor allows the fee to be paid out of plan assets.  If your plan currently has a forfeiture balance this may be used to offset the restatement fee.