Cycle 3 Restatement Reminder & Important Compliance Deadlines

Posted on in categories General , News Update

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. 

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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. 

Reach out to your ABG Southwest relationship manager with any questions you may have about the Cycle 3 restatement. 

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More Compliance Deadlines on the Horizon