Palmer Pension Services, Inc.
4343 Shallowford Road
Suite D-2
Marietta, GA 30062
(678) 215-0909 Phone
(678) 215-0999 Fax
www.palmerpension.com


ALERTS
2017 Pension Plan
Limits Released
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Safe Harbor Notices &
Participant Fee Disclosures
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PPA PLAN RESTATEMENT
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The Internal Revenue Service requires that all Qualified Plans be restated in their entirety periodically in order to bring them into compliance with the statutory and regulatory changes that have occurred since the last restatement period. This will incorporate the language and provisions from the Pension Protection Act (PPA) and various other required amendments that took effect between 2007 and 2011. The current restatement cycle began on April 1, 2014 and will run through April 30, 2016.

The following is a list of frequently asked questions regarding the restatement process:

Why do I need to restate my plan?

The IRS requires that your plan be restated periodically to incorporate recent pension tax law changes and regulations. They adopted a cyclical filing system in 2005 that requires restatement every six years for Pre-Approved Prototype documents.

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What is included in this restatement?

The IRS requires that your plan be restated periodically to incorporate recent pension tax law changes and regulations. They adopted a cyclical filing system in 2005 that requires restatement every six years for Pre-Approved Prototype documents.The language from the Interim Amendments that were adopted since the last restatement has been integrated into the pre-approved prototype document. These include the Amendments for:

  • Final 415 Regulations
  • Pension Protection Act (PPA)
  • HEART Act (Heroes Earnings Assistance and Relief Act)
  • WRERA (Workers, Retiree, and Employer Recovery Act)
  • KETRA (Katrina Emergency Relief Act of 2005)

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What other significant changes are included or available in the new prototype restatement?

  • Multiple Employers can now adopt a Prototype document.
  • Special Deferral Election for any Irregular Pay (not just bonuses).
  • Forfeitures can no longer be used to reduce Employer Contributions that
  • are required to be 100% vested.
  • Hardship Distributions for beneficiaries.
  • QDIA election (Qualified Default Investment Alternative).
  • Automatic Enrollment Provisions.

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When do I need to restate my plan?

The original 6 year cycle ended in April 2010. We therefore have until April 2016 to complete all restatements.

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What information do I have to provide to PPSI in order to restate my plan?

In order to restate your plan we must confirm that we have accurate and current information regarding your company. Therefore, we are asking all of our clients complete a Company Information Form for your business. Similar forms should be completed for each business entity that the company, its owners, stockholders, or partners may have an ownership interest. The form(s) can be mailed, faxed or e-mailed to your respective administrator

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Should my restated Plan be filed with the IRS for a Determination Letter?

The IRS has already reviewed and approved the language in the Prototype documents. This means you automatically have assurance that the language used in your plan satisfies the law. You can rely on the Opinion letter issued to Palmer Pension Services for the prototype documents you use.

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What happens if I fail to amend or restate on a timely basis?

The IRS can disqualify your plan if you fail to meet the deadline. All of the tax benefits would be lost, contributions might not be deductible and employees cannot defer taxation on contributions and earnings. As the IRS cannot audit all plans they do have a Voluntary Correction Program for late amenders. This would be a last resort as there are IRS User Fees associated with this correction program.

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Should I consider any changes when I restate?

We will be reviewing each plan individually and will give you any recommendations for suggested changes. Keep in mind that this is something we do annually for your plan when we complete the year end administration so there may not be any significant plan design changes at this time.

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Do I have to give all Participants a new SPD (Summary Plan Description)?

Yes, the DOL requires the participants to be informed about any material changes. They also require a new SPD be issued periodically. It is generally more efficient to rewrite the SPD at the same time as the Plan Restatement. We will therefore be providing a new SPD in addition to your new document.

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