Post-PPA Plan Document Restatement | Cycle 3

It's official! We're now in a new, 2-year restatement period for qualified retirement plan documents covering profit sharing and 401(k) plans. 

What Is A Plan Document Restatement?

Chances are your qualified retirement plan (401(k) plan for example) is using a pre-approved plan document. If so, the law states that the employer must adopt a new plan document at least once every six years. These 6-year periods are called "cycles" and we've just entered Cycle 3 (a.k.a "Post-PPA.")

Uniglobal and its document provider must completely update all pre-approved plan documents and request new approval letters from the IRS every six (6) years. Generally, employers using our pre-approved documents must adopt the updated pre-approved plan within two (2) years after the IRS issues its letter.

Why Do We Need To Restate Our Plan Document?

Your retirement plan contains language that allows it to enjoy a tax preferred status. In order to preserve that favorable tax status, plan sponsors must meet their duty to keep plan documents up-to-date. Working with you, the team here at Uniglobal will fully restate your plan documents to comply with new laws and requirements under the Post-PPA restatement cycle. We like to think of this as "routine maintenance" (albeit required).

When Do Our Plan Documents Need To Be Restated?

The Post-PPA restatement period begins on August 1, 2020 and runs through July 31, 2022. Uniglobal will restate your plan well in advance of the 7/31/2022 deadline and has a comprehensive process to facilitate this restatement process. Our process will involve electronic notifications and communications, a dedicated resources page, one-on-one provision and feature support during the drafting phase, and more.

What's Included In The Restated Documents and What's Not?

Changes Since The Last Document Restatement (PPA - Pension Protection Act of 2006)

Generally, the following regulatory changes were added between your last document restatement, which was performed between May 2014 and April 2016, and today.

Disability Claims Procedure Amendment
Effective date April 1, 2018, required for plans in which the Plan Administrator determines disability.

Disaster Relief Amendment
Effective for plan years 12/31/2019 forward. This good-faith amendment updated the base document language to comply with the special disaster distributions and loans that Congress has permitted over the past several years.

QNEC/QMAC Forfeiture Amendment
Effective for plan years 12/31/2017 forward. The amendment updates the basic plan document language allowing QNECs and QMACs to be considered nonforfeitable at the time they are allocated to participant accounts. The change permits plans to use forfeitures to fund QNECs and QMACs, including traditional ADP safe harbor matching and non-elective contributions where it had previously been prohibited.

Can We Add or Remove Features (Discretionary Modifications)?

Changes to the design or structure of your retirement plan can be incorporated into your new Post-PPA Plan Documents. This is an excellent time to review with your consultant the features in your retirement plan. Any changes you would like to have included, such as those that better align with your company goals and objectives, could be added with the restatement. 

What changes were made during the Post PPA Cycle and were not incorporated into the new Post PPA documents?

Hardship Distribution Amendment
This Amendment is part of the Bipartisan Budget Act of 2018  and eliminated the suspension of elective deferrals after a hardship withdrawal, removed the requirement to take a retirement plan loan first, and made safe harbor contributions and elective deferral earnings available for hardship.

SECURE Act Amendment & CARES Act Amendment
We anticipate release mid-2021 for these Interim Amendments to be available. Plans may operate under the Acts provisions from the date they became effective as the Interim Amendments will be retroactive to those past dates. 

New Start-Up Plans & Converting Existing Plans

For sponsors starting new retirement plans or for existing plans converting to Uniglobal, we will provide you with a Post-PPA plan document as part of our on-boarding and installation process. Learn more about our process for new client transitions.