The IRS recently issued to document vendor opinion letter approvals for updated and pre-approved documents for defined contribution plans. This starts the next cycle of required restatements of the defined contribution plan documents. If you are an employer who is currently sponsoring a 401 (k) plan, profit sharing plan, money purchase plan, or ESOP, and the plan document is currently on a pre-approved document by the IRS, you will need to rephrase your plan document on a new approved document no later than July 31, 2022.
Deploying these new documents to plan sponsors is, of course, a big undertaking for pension plan document providers, and they will be tackling this task very systematically over the next few months so that their employers adopters can meet the deadlines. The document providers play the main role in the process of reprocessing the plan. They will advise plan sponsors of the expected date of their plan reformulation process and give plan sponsors time to review draft documents with legal counsel, obtain approval from the board of directors, and sign and return documents. documents. The documents will include the updated plan and usually an updated service agreement.
It is important to keep in mind that the plan sponsor / employer must be aware of the process. The plan sponsor is responsible for reviewing, approving and adopting the relief. The Document Provider will generally not accept responsibility for the timely completion of this process or the accuracy and correctness of the documents. Drafting errors are not uncommon, so it is essential that employers do not treat the reprocessing draft as a superficial “sign and return” task. The plan sponsor should carefully review the draft to ensure it is accurate. This process is also an opportunity to compare the plan provisions with the actual administration of the plan and to consider changes to the design of the plan. When you receive the draft documents from your document provider, we strongly recommend that you devote sufficient time and attention to completing this important task.