COVID-19 has brought many changes to retirement plan laws. In addition, plan documents are still being updated for pre-COVID 19 laws such as the 2019 SECURE Act.
Back in the days of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA), the IRS adopted a system of cyclical amendments to manage the process of updating retirement plans for changing laws. Most employers last “restated” their plan documents in 2016.
The third or “Post PPA” restatement cycle is winding up and plan sponsors are required to sign updated documents by July 31, 2022. While that date may seem far off, consider the fact that the date represents the tail end of the most recent “cycle” in play since 2016. Of course, many laws have changed since then and many of those changes will be added to the new documents as interim “tack-on” amendments.
Some employers have not adopted the “hardship” amendment due by year end 2021. Now is a good time for employers to review their plans, adopt required updates and make other changes if appropriate. By taking the time now, employers have the time to understand and be thoughtful about decisions affecting their business and their employees in retirement.
Please contact the employment law attorneys at Kerr Russell with any questions about updating or adopting a 401(k) plan.
About the author:
Liam K. Healy focuses his practice on helping clients maintain compliance with the myriad of state and federal tax laws and regulations that govern individuals and businesses. A particular focus of Liam’s practice is in the area of employee benefits and ERISA. Liam specializes in designing pension and executive compensation plans to benefit business owners and executives. His practice includes drafting and reviewing deferred compensation agreements, severance agreements and non-compete agreements, representing employers in multi-employer plan collection and withdrawal liability matters.
Other posts to consider: