As a reminder, the current plan restatement cycle that started on May 1, 2014 ends on April 30, 2016.
To incorporate the provisions from the Pension Protection Act and various other required amendments that took effect between 2007 and 2011, all defined contributions plan documents need to be restated no later than April 30, 2016.
The IRS may disqualify a plan that does not comply with the plan restatement requirements, which could result in taxation for the participants and loss of deductions and penalties for the employer.
The final plan restatement documents typically consist of the following:
- A restated Plan Document or Adoption Agreement
- A resolution adopting the restated document
- A separate trust document if appropriate
- A restated Summary Plan Description that must be distributed to all participants and beneficiaries.
2016 Defined Contributions Plan Deferral Limits Reminder
- The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged in 2016 at $18,000.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged for 2016 at $6,000.
Contact your local ABG Houston representative with any questions you may have about plan restatement or plan limits. ■