IRS: Important information regarding the restatement of plan documents

  The periodic restatement of plan documents for qualified retirement plans as required by the IRS is a topic with which plan advisors and plan participants should be aware.

Every five or six years, the plan documents for qualified retirement plans like 401Ks must be restated, or updated, per Internal Revenue Service rules. Qualified retirement plans, per the IRS, are governed by Internal Revenue Code 401(a), which defines such a program as “a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries.”

The reason a plan must be updated and resubmitted is because the tax law allows certain plan changes to be effective retroactively. This is to ensure these changes are included moving forward, and are incorporated within a defined period.

Plan restatement and how it affects firms and plan participants is a particularly timely issue at the moment. In 2014, the IRS provided official guidance on many pre-approved qualified retirement plans that had undergone restatement, giving the employers using these plans until April 30, 2016 to adopt the plans. Firms who have yet to adopt the new plans must do so by the deadline or risk being ineligible for tax breaks, according to the IRS. (Pre-approved plans are already certified by the IRS, and new plan documents are issued every six years. By contrast, individually designed plans have to restate every five years.)

Ultimately, it’s best for firms and plan advisors alike to be aware of the importance of these IRS regulations. If you would like more information on the restatement of plan documents, contact Plexus Financial Services, LLC at 847-307-6222 or visit


Internal Revenue Service, Retirement Plans FAQs regarding Plan Language Issues for GUST and EGTRRA:

IRS, Governmental Plans under Internal Revenue Code Section 401(a):

Cornell University Law School, Internal Revenue Code Section 401:

IRS, IRS 401(k) Plan Fix-It Guide:

IRS, 2016 Deadline to Adopt Restated Pre-Approved DC Plans:

IRS, Announcement 2014-16:

Benefit Resources Inc., Pension Protection Act (PPA) document restatement FAQs:

About Plexus Financial Services, LLC

Plexus Financial Services is located at 21805 West Field Parkway, Suite 300, Deer Park, IL 60010. Securities and advisory services offered through Plexus Financial Services, LLC, Member FINRA/SIPC, a Registered Investment Adviser.