Blue Ridge ESOP Associates Industry News

401(k) Pre-approved Plans – It’s Restatement Time

Posted by Dolores P. Lawrence, CPA, QKA

Jul 3, 2014 4:25:55 PM

401k_roadsignIf you are a sponsor of a 401(k) or profit sharing plan, it is likely that your plan documents are in the “pre-approved” category (prototype plan document or volume submitter). Such plans are subject to six-year restatement cycles. The next restatement cycle, referred to as the PPA Restatement period, opened May 1, 2014.

A restatement is a complete re-writing of your plan document to incorporate changes in laws that have occurred since the end of the prior cycle. This includes the Pension Protection Act (PPA), the Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART) as well as other changes.

If we are responsible for maintenance of your pre-approved 401(k) or profit sharing plan document, we will amend and restate your plan on or before April 30, 2016 (deadline for restatement). You will receive a new plan document, Summary Plan Description for your participants and a copy of the IRS approval letter for our volume submitter document.

Generally, the cost for a required plan document restatement may be paid by the plan or the plan sponsor. If you have additional questions about the process or associated costs, please contact us.

If you sponsor an ESOP or KSOP, your plan document is considered “individually designed” rather than “pre-approved.” These plans have a five-year restatement cycle. Generally, the deadline for restatement is dependent on the last digit of the Employer Federal Tax Identification Number. Please contact us if you have a question about the five-cycle and how it applies to your plan.

Topics: Plan Design