Amendment & Restatement: Is your plan included?

Most retirement plans have adopted a pre-approved plan published by a third party. If your plan is included, you may see the term “prototype” or “volume submitter” in the plan document or on its cover page. You can also refer to the “Federal income tax status” footnote of your plan’s audited financial statements to see what type of plan you have.

Pre-approved plan documents must be amended and restated every six years under IRS regulations. The next amendment and restatement period is currently open and will close on April 30, 2016. If you have currently adopted a pre-approved plan, you will need to adopt a new Pension Protection Act (PPA) compliant plan document prior to this date.

As the Plan is going through the process, we recommend you take the opportunity to amend any current plan provisions that the Plan Sponsor would like to change. At the same time, as you are completing, reviewing and signing the new adoption agreement and related plan document, please be careful that unintended changes to the plan are not inadvertently made.

The plan document, and any corresponding adoption agreement, contain the provisions by which your retirement plan is governed. The provisions must be strictly adhered to by the Plan Administrator and those involved in payroll and human resources. Deviations from the plan document generally need to be corrected, and corrections can be very costly to the Plan Sponsor, both in time and dollars. Knowing and understanding the plan provisions is key to remaining compliant with the document, and maintaining the plan’s tax-exempt status.

If you have any questions about your plan, specific to this topic or any other, please contact your BeachFleischman client service professional, or contact me directly.

CariAnn Todd
CariAnn Todd

CariAnn Todd is a Senior Manager in the firm’s Accounting & Assurance practice. She provides client service in the areas of audit, accounting, and consulting for a variety of privately held businesses. She has been in public accounting since 1995.