Retirement Plan Documents Must Be Restated for EGTR
The IRS will now review restated plan documents either every five or six years, depending on the type of plan document (individually designed, pre-approved prototype, or volume submitter). Pre-approved plan documents (also referred to as prototype and volume submitter) will be required to be restated every six years.
For employers sponsoring individually designed plans who have a 1 or 6 as the last digit of their EIN, plan amendments and IRS submissions are due by January 31, 2007. Plan documents for individually designed retirement plans will be required to be restated every five years and must be submitted to the IRS based on the schedule below:
Staggered Five-Year Reporting for Individually Designed Retirement Plans
|
Cycle |
Last Digit of Employer’s EIN |
Special Situations |
EGTRRA Filing Cycle |
Next Filing Cycle |
| A |
1 or 6 |
|
2.1.06 – 1.31.07
|
2.1.11 – 1.31.12
|
| B |
2 or 7 |
All Multiple Employer Plans |
2.1.07 – 1.31.08 |
2.1.12 – 1.31.13 |
| C |
3 or 8 |
All Governmental Plans |
2.1.08 – 1.31.09 |
2.1.13 – 1.31.14 |
| D |
4 or 9 |
All Multiemployer Plans |
2.1.09 – 1.31.10 |
2.1.14 – 1.31.15 |
| E |
5 or 0 |
|
2.1.10 – 1.31.11 |
2.1.15 – 1.31.16 |
More and more employers that sponsor defined contribution plans (profit-sharing, 401(k), and money-purchase plans) have concluded to utilize pre-approved plans rather than individually designed plans because of their flexibility and cost effectiveness. As noted above, pre-approved document providers are on a six-year reporting cycle and have already submitted their documents to the IRS for review, but the IRS has not yet approved any of them, and individual employers sponsoring plans are not expected to have to adopt amendments before the end of 2007.
Required Action
Employers should have their plans reviewed by their third-party administrator, consultant, or attorney to determine:
- he type of plan they have
- When, or if, they need to amend their plan
- For adopters of individually designed plans, if to switch to a prototype plan (To accomplish this, employers must execute IRS Form 8905, Certification of Intent to Adopt a Pre-Approved Plan, or adopt a pre-approved plan prior to the end of their cycle noted in the above chart.)
Plante & Moran Can Help
Plante & Moran is available to discuss the advantages and disadvantages of the pre-approved plans and to assist with plan design decisions. We also have prototype plans available for employers to adopt.
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