IRS extends remedial amendment deadline for preapproved pension plans
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The IRS maintains a system of preapproved retirement plan documents. Preapproved plan documents are very helpful for small and mid-sized employers to maintain their 401(k) or pension benefit plans. When an employer adopts a preapproved plan by signing an Adoption Agreement, the employer can rely that the underlying terms of the plan document meets the requirements of the Internal Revenue Code. As a part of the preapproved plan process, employers need to amend and restate their plans every six years by signing an updated Adoption Agreement.
The next restatement deadline for defined benefit pension plans was April 30, 2020. However, the IRS extending the April 30, 2020, deadline to July 31, 2020, for employers to adopt a pre-approved defined benefit plan and to submit a determination letter application (if eligible) under the second six-year remedial amendment cycle.
An employer that adopts, by July 31, 2020, an updated pre-approved defined benefit plan will be able to rely that the terms of the plan document comply with the Internal Revenue Code.