Post-PPA Plan Document Restatement Cycle 3 (2020 – 2022)
Required IRS Changes and Best Practices

IRS Required Changes

• The IRS required that the Trust provisions be carved out into a separate document, so you will have both an Adoption Agreement and a Trust Agreement.
• For Plans with a discretionary match, the IRS required that the Plan specify the allocation method and deposit schedule. To meet this requirement, the Plan now indicates a uniform percentage allocation method and year-end deposits.
• Regulations require that “disability” be defined for 401(k) Deferral and Safe Harbor sources as a condition precluding gainful employment that can be expected to last for at least 12 months or result in death. If your Plan uses a different definition for other sources, we will change it to match so the definitions are consistent.

Best Practices

• In order to facilitate Mandatory Distributions, the cash pay-out has been limited to $200. Amounts that are forced out between $200 and $5,000 are to be rolled over to an IRA.
• Extended payment periods for death benefits will be included. This provision reduces the chance of penalties for payments not started timely, while also allowing for beneficiaries to elect a five-year withdrawal period.
• Partial payments to terminated employees will be allowed in addition to lump sums.

• Post-PPA Main
• Amendment and Restatement introduction