Plans that are terminating must be updated at the time of termination to reflect all applicable qualification requirements then in effect. This means the plan must have all relevant amendments at termination date. This may include requirements that were not listed on the most recent annual IRS Cumulative List.
General Rule: Plans do not need to be restated for PPA, even when being submitted to the IRS for a determination letter upon termination using Form 5310 (see Section 12.06 of Revenue Procedure 2014-6 and Section 8 of Revenue Procedure 2007-44). However, if a plan is not being submitted to the IRS for a determination letter on plan termination, then we recommend that the plan be restated, whenever possible, onto a PPA pre-approved document. This way the employer can be assured the plan language satisfies the changes made by PPA (and the other changes in the law that are included in the PPA document). If the plan is not restated, then there is no reliance on the interim good-faith amendments that have been adopted and this could be a problem upon an IRS audit (if the auditor finds any defects in those good-faith amendments).
For ongoing pre-approved defined contribution plans, the restatement deadline is April 30, 2016. Thus, if a plan is terminated after April 30, 2016, then it must have been restated for PPA in accordance with the deadline for ongoing plans.
Amendments: If the employer chooses not to restate the plan, then the plan should be on an EGTRRA document and have the necessary tack-on amendments: Section 415 final regulations, PPA and HEART/WRERA. There were also amendments that might have been needed, depending upon the administrative options elected by the employer, or because the SunGard preapproved language was modified, as described below:
Normal retirement age. This amendment is only needed for pension plans that have a normal retirement age less than age 62. It applies to defined benefit plans, money purchase plans (including target benefit plans), and profit sharing/401(k) plans that include merged money purchase plan assets. IRS Notice 2007-69 provides additional details on this requirement.
Midwest Disaster Relief. Similar to the Katrina amendments, all plans in Midwestern states that were affected by the 2008 storms are allowed to make loans and hardship distributions under certain circumstances. The due date is the last day of the 2010 plan year.
In-Plan Roth Rollovers and Transfers: These amendments were only required if the plan adopted these features. Note: the 2013 amendment adding In-plan Roth rollovers of otherwise nondistributable amounts is not incorporated into the PPA restatement.
DOMA: SunGard’s retirement plans do not contain language that would conflict with the Windsor decision or IRS guidance. In most cases, plans do not need to be amended for this, unless the plan language was changed. The issue is discussed in depth here: http://www.relius.net/News/TechnicalUpdates.aspx?ID=1031
We have a generic termination amendment available on our amendment page at http://www.relius.net/Amendments/
If you are a subscriber to the Pension Library OR ERISA Forms, you also have access to the termination amendment.
If you cannot access the amendment page, please contact Client Account Services at 800-326-7235, option 6. For more details and/or to subscribe to the Pension Library/ERISA Forms products, click here.
SunGard will be presenting Web seminars dealing with our prototype and volume submitter documents. We will announce specific dates shortly, here: www.relius.net/Events/events.aspx?Web
Don’t miss our live classroom workshop, Fundamentals of 401(k) and Other Qualified Plans, in June and July. View program details and register online here: www.relius.net/Events/events.aspx?Seminar
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Fundamentals of 401(k) and Other Qualified Plans, July/August – Register is open
5 Locations Only – Fundamentals of 401(k) and Other Qualified Plans is a 3-day course combining an introduction to 401(k) plans with a comprehensive study of defined contribution plan requirements and challenges of qualified plan administration. Speakers examine the unique administrative and testing rules essential to 401(k) plan compliance and use case studies and presentations to teach attendees how these rules apply to everyday situations. Register online, at: www.relius.net/Events/events.aspx?Seminar
More Live Classroom Seminars – only a few dates remaining!
PPA Pre-approved Plan Workshop – Corbel, and PPD Documents
401(k) Plan Workshop, Tax Forms Workshop: 5500 and more
www.relius.net/Events/events.aspx?Seminar
Chicago Advanced Pension Conference, September 3-5 – Registration open!
Topics on the agenda include: PPA restatements, reducing practitioner liability, understanding and outsourcing fiduciary functions, an update on legislative and regulatory changes, advanced nondiscrimination testing issues, mid-year changes to safe harbor 401(k) plans, and much more. General sessions and 21 breakout sessions to choose from, deeper discounts for multiple registrants from the same firm. Earn up to 19 hours of CE credits. See complete program agenda and register online on our Web site.
Just for ERPAs Workshop – Chicago, September 2 – Register today
Scheduled on Tuesday, September 2, the day before the APC, this workshop covers earned income, IRS audits, business acquisitions, automatic enrollment and professional responsibility. Earn up to 8 hours of ERPA credit, including 2 ethics hours. With the end of the ERPA conference co-sponsored by the IRS, this seminar is more important and timely than ever, offering a unique opportunity for ERPAs to meet with each other and refine their knowledge on some of the most important topics facing practitioners today. Register for both the Chicago APC and the ERPA Workshop, and pay only $250 for the Workshop, a savings of $160. See event details and register online on our Web site.
Upcoming Web Seminars
New Ways to Avoid Late Filing Penalties, June 19, 12:00 pm ET
Details and online registration: www.relius.net/Events/events.aspx?Web |
