Beware of those plan document restatement requests

by Ary Rosenbaum
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Ary Rosenbaum - The Rosenbaum Law Firm P.C.

Every 6 years or so, the Internal Revenue Service (IRS) requests that retirement plan documents be restated to comply with current law. While it’s a great thing for ERISA attorneys and third-party administrators, it’s not so great for plan sponsors who have to pay for it.

In the interim period between restatements, the IRS may require ancillary amendments, which are tack-on amendments with model language to comply with a small change where the IRS wants an amendment, but not a full-blown restatement.

We’re currently in the interim period and while there is a change in certain aspects of the disability retirement provisions that might require an amendment, there is no need for a full restatement. I recently saw a third party administrator tell an advisor whether they want to restate the plan document they didn’t draft.  Beware that there maybe plan providers out there that want to charge for a full restatement when a tack-on amendment will suffice. Plan documents are usually only restated when there is a change in the law, substantial plan changes, and when a plan sponsor leaves plan providers whose prototype document they rely on. Otherwise, they may be more for what they really don’t need.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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