Issue link: http://viewer.e-digitaledition.com/i/643923
FOR ALL EMPLOYERS who sponsor a 401k or profit-sharing plan, do not forget to amend and restate your plan document. It is the plan fiduciary' responsibility to ensure that the plan is updated and signed by April 30, 2016, the deadline imposed by the IRS. If a plan sponsor fails to restate a plan, it will jeopardize its qualified status. When a plan loses its qualified status, it may result in a loss of deductibility of contributions for employees and the employer. It may also result in employees' vested account balances becoming immediately taxable or ineligible for rollover into IR As or other qualified plans. Plan restatements will incorporate the language and provisions from the Pension Protection Act (PPA), and numerous other required amendments that took eŸect between 2007 and 2011. The final signature-ready documents will likely consist of the following: + A restated Plan Document and/or an Adoption Agreement + A Corporate Resolution adopting the restated document + A separate Trust Document + A restated Summary Plan Description that is required to be distributed to all participants and beneficiaries In order to make this process much easier for the employer, a Volume Submitter Specimen Plan or Prototype Document, which are already designed and approved by the IRS, are available to you to assist with any potential plan design options. During this process you should also consider consulting with an advisor or attorney on plan design issues, such as: new safe harbor rules for automatic enrollment plans, hardship distribution changes, new rules for automatic enrollment, more flexible vesting schedules, reporting simplification, and in-plan Roth conversion, just to name a few. Be aware not to take this requirement lightly, as according to the Department of Labor, over $1.5 billion was collected in 2013 for plans which were out of compliance. The potential fines range from $750 to $5,000 for failing to comply with the restate- ment deadline. NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. Lucas W. Murray is an attorney with the law firm of Krugliak, Wilkins, Gri§ths & Dougherty Co., LPA, in Canton, Ohio. ■ 2 8❱❱❱❱❱ L E G A L E A S E 401k Plan Qualifications and Plan Design BY LUCAS W. MURRAY, ESQ. KEEPING UP WITH YOUR 2 8