What is a "plan restatement"?

A restatement is a complete re-writing of the plan document. It incorporates changes from any mandatory or voluntary amendments that may have been adopted since the last time the document was re-written.

Why do we have to restated our plan?

Plan documents are drafted based on laws and regulations set forth by Congress, the Treasury Department (IRS), and the Department of Labor. As those laws and regulations change, documents must be updated to reflect those changes.

Is a plan restatement optional?

Yes, this current plan restatement (Cycle 3 Restatement) is mandatory per the IRS.

What is the restatement deadline?

Your plan documents must be updated to comply any time between August 1, 2020 to July 31, 2022.

What if a plan is not restated?

Plans that do not adopt a restated plan document by the July 31, 2022 deadline will be subject to IRS-imposed penalties. Failure to timely restate the plan will also jeopardize the plan’s tax-qualified status.

What if a plan was just established?

The restatement cycle is set by the IRS without regard to a plan’s initial effective date so even newly-established plans MAY need to be restated.

What if a plan terminated in 2021 or is planning to terminate soon?

The IRS requires that all documents be brought up to date with current laws and regulations as part of the termination process. As a result, your document must be amended and/or fully restated as part of the plan termination process to satisfy the IRS guidelines. Click here to learn more.

What has been updated in my plan document for this restatement cycle?

Each restatement cycle includes new laws added by Congress and IRS procedural changes. Overall, your document will have the same basic outline. A few changes to note are the following:

• The starting RMD age has been increased from 70 1/2 to 72.

• Safe-harbor plans can make changes once the year has started, including the ability to reduce or suspend contributions mid-year.

• Rollovers to a SIMPLE IRA plan from a 401(K)/Profit Sharing account is now permissible.

• For plans with hardships, participants may now withdraw from all sources (including 401K and Roth sources) and participants no longer have to suspend deferrals for 6 months after taking a withdrawal.

Can we pay for the restatement fee from the plan assets?

You could...if you had to. However, unlike most TPA's, Leverage includes this service as part of our flat-rate pricing.