Retirement Plan Document Timeline Update

Retirement plan documents must continually be updated to reflect the latest laws, regulations, and other guidance from government agencies. Most often these updates are accomplished through interim amendments that supplement and clarify the existing plan document. However, periodically the entire plan document must be rewritten or “restated” to incorporate all of the changes into one document. While it is common to have a required interim amendment nearly every year, plan restatements are typically only required every six years. The following is a brief overview of where we stand on interim amendments and restatements:

  • Interim Amendment for Hardship Rules: Recent law changes led to the relaxation of some rules regarding hardship distributions from retirement plans. While most of these rules became effective for plan years beginning after December 31, 2018, the plan does not need to formally amended until some point in 2020 or 2021. We anticipate that for most plans, TSC will be able to adopt this amendment on behalf of plan sponsors. Once the amendment is available, we will notify plan sponsors and provide them with instructions about their next steps.
  • Restatement for 403(b) Plans: A restatement of all IRS-preapproved 403(b) plans is currently in process. Those plans must be restated and adopted by March 31, 2020.
  • Restatement for Defined Benefit Plans (Including Cash Balance Plans): Defined benefit and cash balance plans are also in the midst of a restatement cycle. These IRS-preapproved plans must be restated and adopted by April 30, 2020.
  • Restatement for Defined Contribution Plans (Including 401(k) Plans): The last restatement cycle for defined contribution plans closed on April 30, 2016. If the IRS continues with the current six-year restatement cycle, those plans would have to be restated again between May 1, 2020 and April 30, 2022. However, there was a delay in the IRS submission deadline to obtain preapproval on those documents. Due to that delay, it is possible that the IRS will push back the start of the next restatement cycle. Stay tuned!

Juhl Stoesz, Vice President, Compliance and General Counsel
Andrea Gelhar, Retirement Plan Compliance Consultant