Post-PPA Best Practices

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.