Years ago, each employer that had a retirement plan typically used its own “individually designed plan document” (usually drafted by an attorney) to memorialize the terms and conditions of the plan. The usual practice was to submit the document to the IRS for a “determination letter”, and for a fee, the IRS would approve the document as properly including all IRS-required provisions.
Today, the IRS has a program whereby retirement plan service providers, such as ACSI, apply to the IRS and work with the IRS to obtain a Favorable Opinion Letter from the IRS. The IRS letter covers the “Basic Plan Document” (“BPD”) and the “Adoption Agreement” (“AA”), which has blank lines to be completed and boxes to be checked by the employer. If the selections and inserts in the AA are consistent with what the IRS allows, the IRS deems the plan documents to be in compliance with IRS requirements.
ACSI, like most TPAs, has IRS-approved 401k Plan and 403b Plan BPDs and AAs that have been approved by the IRS. The IRS uses a six-year cycle that requires ACSI to submit an updated BPD and AA to the IRS for re-approval. Changes in law and new or modified IRS guidance since the prior approval are reflected in the updated plan documents. ACSI pays the IRS a fee for IRS approval of the BPD and AA and for the Favorable Opinion Letter.
The IRS recently issued the new 401k Plan Opinion Letter. Existing plan documents need to be amended and restated onto the new, updated documents in order for the plan to continue to be IRS-approved. The IRS has us “on the clock” to do restatements now, before the IRS deadline in July 2022.
ACSI will be contacting clients about the restatement work. A letter will be sent in advance of doing the work.
ACSI (www.acsi-ny.com or firstname.lastname@example.org) is available to help you learn more about the IRS restatement program.