Overview

The final 401(k) regulations require many employers with 401(k) plans to amend their plans by December 31, 2006. EGTRRA requires employers to restate their retirement plan documents as early as January 31, 2007.

A series of unrelated laws, regulations, and pronouncements will require employers to take action and review their qualified retirement plans and amend them as necessary. We expect that most employers who sponsor 401(k) plans with calendar year ends will be required to take action by December 31, 2006. A plan utilizing any discretionary provisions must be amended before the end of the plan year in which it is to be effective, generally December 31, 2006 for calendar year plans.

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) requires employers who sponsor any qualified plan to restate their plan document as early as January 31, 2007 based upon a staggered five-year schedule. Other pending, but inevitable, legislation will significantly impact defined benefit plans from a funding and financial statement perspective; defined contribution plans will be impacted in the way that professionals are allowed to provide plan participants investment advice.