Cycle 3 Restatement Reminder & Important Compliance Deadlines
Let’s Talk Tax…
In this article, we provide a Cycle 3 restatement reminder and update you on important upcoming compliance deadlines for defined contribution plans.
Article Continues Below
Stock Market Volatility: Stay the Course in Uncertain & Volatile Times
SECURE Act 2.0: More Change on the Horizon for Retirement Plans
Cycle 3 Restatement Reminder
Approximately every six years, the IRS requires most company-sponsored retirement plans to update their plan documents through a process called “restating” the document. The IRS-announced Cycle 3 restatement window began August 1, 2020, with a final deadline, coming soon, of July 31, 2022.
Need To Knows
- A restatement is a complete re-writing of the plan document. It incorporates changes from any mandatory or voluntary amendments that may have been adopted since the last time the document was re-written.
- While some plan sponsors may choose to voluntarily restate their plans from time to time for various reasons, the upcoming plan restatement is mandatory.
- Now is the time to focus on updating 401(k) and other plans, including profit-sharing, money purchase and employee stock ownership plans, to the Cycle 3 versions.
- Plans that do not adopt a restated plan document by July 31, 2022, will be subject to IRS-imposed penalties, which could include revocation of the plan’s tax-favored status.