New laws, regulations and other guidance require that your Qualified Retirement Plan be “restated” to bring it up to date. The IRS has established a Cycle for plan restatements. For IRS Pre-approved documents, that cycle occurs every 6 years. We are now in Cycle 3. The deadline for restating all 401(k) and Profit Sharing Pre-approved documents is July 31, 2022.
The IRS publishes a “Cumulative List” of laws, regulations and guidance for each Cycle. Cycle 3 documents have been reviewed and pre-approved based on the Cumulative List published in IRS Notice 2017-37 dated September 11, 2017. This list identifies specific matters that the IRS has reviewed to determine if a Qualified Retirement Plan has been properly updated.
With few exceptions, the IRS will not consider Guidance or Statutes enacted after February 1, 2017, Qualification requirements first effective in 2018 or later, or Statutory Provisions that are effective in 2017 for which there was no guidance as of September 11, 2017.
The 2017 Cumulative List includes items listed in the 2011-2015 Cumulative Lists, or items issued after October 1, 2015.
The IRS reviews each “Basic Plan Document” or BPD. The BPD must contain the revisions required on the Cumulative List. An Adoption Agreement is completed for each Plan Sponsor which has a selection of available plan provisions based on the pre-approved BPD.
Specific provisions affective by the 2017 Cumulative List include changes due to U.S. v Windsor. Qualified Plans are not required to make additional changes due to Obergefell v Hodges recognizing same-sex marriages.
Special rules for Defined Contribution Plans, including 401(k) and Profit Sharing Plans, provide lifetime income by offering as investment options, a series of Target Date funds that include deferred annuities among their assets, even if some of the Target Date funds within the series are available only to older participants.
Final regulations that provide a limited modification of Required Minimum Distribution rules for Qualified Retirement Plans holding qualifying longevity annuity contracts.
Employer securities that are readily tradable on an established securities market.
Relief from anti-cutback rules for Employee Stock Ownership Plan amendments that become subject to diversification requirements to eliminate all in-service distribution options previously used to satisfy the diversification requirements.
Final regulations giving guidance on permitted mid-year reduction or suspensions of Safe Harbor non-elective contributions in certain circumstances for amendments adopted after May 18, 2009 and revise requirements for permitted mid-year reductions or suspension of Safe Harbor Match for plan years beginning on or after January 1, 2015.
- Mid-year changes to Safe Harbor 401k Plans under certain circumstances
- Proposed regulations on QMACs and QNECs
- Protecting Americans From Tax Hikes Act of 2015 to permit rollovers from a Qualified Plan to a SIMPLE IRA.
- American Taxpayer Relief Act of 2012 provides rollovers from a plan account to the plan’s designated Roth account can include rollover of an otherwise non-distributable amount.
- Guidance on all in-plan Roth rollovers.
- QJSA and QPSA rules that apply when a deferred annuity contract is purchased under a Profit Sharing Plan.
- Treatment of Missing Participants
- Forfeitures can now be used at the Employer’s discretion.
Interim Amendments are required to keep a pre-approved plan up to date between document submission periods during applicable remedial amendment Cycles. Disqualifying defects may result due to a change in law or regulations, or issuance of other published guidance. Disqualifying provisions includes the absence of a plan provision required by, or if applicable, integral to the applicable qualification change.
An Amendment that addresses a disqualifying provision is an Interim Amendment. The Remedial Amendment Period is extended to apply to an amendment to an existing plan if the amendment was timely adopted and in good faith with the intent of maintaining the qualified status of the Plan.
The extension of the Remedial Amendment Period also applies when the provider or employer determines, reasonably and in good faith, that the plan did not require an Interim Amendment. The IRS does not review or approve Interim Amendments.
The Pension Protection Act Interim Amendment provisions were incorporated into the Cycle 3 documents to the extent allowed by IRS. Certain provisions have not been incorporated into the Cycle 3 document, so Interim Amendments will be attached to the Cycle 3 document.
Interim Amendments will include
- Final Hardship Distribution Regulations
- SECURE Act
- Miners Act
- CARES Act
- New Automatic Contribution provisions for ACA, EACA or QACA Plans
- Allowance of Partial Lump Sum Distributions
- Definition of Disabled for purposes of distributions, vesting, and determining disability.
- Limits on deferrals on bonus pay
Please contact us to discuss how any of these revisions may affect your current document.