Plan sponsors that have added additional features and benefits to their retirement plans during 2017 will need to make sure that the discretionary amendments are signed before December 31s. . Those who have made such amendments must also take the time to ensure they’re adopted formally before the close of the year.
Storm And Disaster Relief
Some retirement plans have utilized the IRS relief which was provided in both 2016 and 2017 for workers who were affected either by the storms that occurred in Louisiana in 2016 or Hurricane Matthew. Announcements from the IRS confirmed that the relief provided loans which were more flexible to those that were adversely affected, but depending on your plan, an amendment might be needed to allow for the relief. If so, the plan should be amended before December 31st.
The IRS has also provided disaster relief on loans for those who were affected by Hurricane Harvey, Maria and Irma, as well as the wildfires in California. Should an amendment be required to distribute the relief which is given through the IRS, these plans will need to be amended by the 31st of December, 2018. Along with the relief from the IRS, Congress has also provided tax relief such as from the ten percent penalty for early withdrawal as well as the 20% withholding penalty.
Amendments Which Are Required
While the majority of retirement plans do not have amendments which are required, some do, and it is important to determine if your plan qualifies. Some of the amendments which a retirement plan may be subject to include the Cash Balance Final Regulations, which is associated with IRS regulations on plans for cash balances which were issued in 2015. The Updated Disability Claims Procedure is another amendment from the Department of Labor involving regulations regarding procedures for disability claims. While the regulations will affect disability claims which are filed after January of 2018, the Department of Labor has stated that finalized regulations may be amended.
The Required Amendments List of 2016 states that retirement plans may be subject to amendments to designate how the AFTAP or Adjusted Funding Target Attainment Percent will be calculated. An amendment may be required for retirement plans that don’t utilize the limitation. The deadline for this is December 31st of 2018.
While there aren’t any major amendments which are required for 2017 retirement plans, the changes which will occur will likely have a considerable impact on the compliance of plans in the coming years. The fourth quarter is therefore the perfect opportunity for each plan sponsor to evaluate the retirement plans which qualify and ready them to meet the upcoming deadlines. It is best to contact an attorney as they will ensure the filing procedures are correct and they can also discuss various plan amendments as well as the deadlines which are applicable to them.