Do you sponsor a tax-qualified retirement plan that was pre-approved by the IRS? If so, pre-approved documents take one of two forms.
One is a prototype plan that uses a checklist-type Adoption Agreement and is paired with a basic plan document containing all of the technical plan rules.
The other is a volume submitter plan, which reads like a book, but likewise was prepared by a document provider using software and a checklist that was pre-approved by the IRS.
If your retirement plan is maintained by an administrative or investment firm, chances are you are using a pre-approved plan. Why does this matter?
The IRS has established a two-year period during which all pre-approved plans must be amended and restated to bring them into compliance with recent tax law changes. IRS Announcement 2014-16 provides that employers who are using a pre-approved document are required to amend and restate their retirement plans between now and April 30, 2016.
You should contact your plan service providers to determine if this requirement impacts your business and, if so, to work to get your plan updated. Missing an amendment deadline puts the tax-qualified status of your plan at risk, and your business may be subject to penalties.
Also, use caution and spend the time to carefully review any proposed plan changes, ask questions, and compare your proposed plan to your prior plan document. Inadvertent document changes occasionally happen when updates are made, and they are very costly to fix. You also may find it helpful to have your updated plan documents reviewed by your attorney to minimize the likelihood of these errors.