Why Restatements?

Qualified retirement plans are required to maintain written plan documents which spell out how the plan operates – including important plan provisions. How benefits are calculated, when they are payable, how the plan can be amended or terminated are a few examples.

Since the IRS frequently makes changes to the laws and regulations which govern retirement plans, these plan documents are required to be amended and restated approximately every 6 years to make sure the plan remains in compliance.

We are currently approaching the 3rd required restatement cycle for qualified DEFINED BENEFIT plans. So-called “Cycle 3 Restatements” are required by March 31, 2025. Note – Defined Contribution plans operate on a different cycle and their Cycle 3 Restatements are already complete.

These restated Defined Benefit plan documents will fold in any stand-alone amendments for your plan since its prior restatement and any IRS required changes listed in the “Cumulative List of Changes in Retirement Plan Qualification Requirements” issued by the IRS for 2020. There’s always a few year lag between the “Cumulative List” and the year in which a document statement is required. Otherwise, we’d always be chasing our tail trying to update the plan document for real time policy changes!

What does this mean for you as the Plan Administrator? If IAI maintains your plan document, you can expect a draft restatement of your document and an adopting resolution in 2024 for your (and your legal counsel’s) review and signature. You will also receive an updated copy of the Summary Plan Description for plan participants.

If you have been contemplating plan changes, the restatement process can be a great time to make these to avoid having additional stand-alone amendments. If this is the case, contact your IAI consultant as soon as possible!

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