Common Questions about the PPA Restatement logo

  Q: What is the PPA Restatement and why is it required?

“PPA” stands for the Pension Protection Act. It was introduced in 2006 by President George Bush to ensure that companies analyze their pension plans’ obligations more accurately, and to ensure that plan provisions do not favor higher-paid employees. The PPA Restatement is a regulatory requirement of the Internal Revenue Service (IRS) which requires that all 401 (k) plans in the United States must amend their plan’s legal documents. Employers are given a two-year window of time (a “restatement window”) in which they must amend their 401(k) plans to meet this important federal requirement. Restatement windows should be thought of as “windows of opportunity,” because they allow plenty of time to make not only the required changes to ensure compliance with the IRS, but also enhancements to help your organization.

Q: We already amended our retirement plan documents, does the PPA Restatement requirement still apply to us?

The answer is likely yes, depending on when your amendment was completed. The IRS released the PPA Restatement in the middle of 2014 to all 401 (k) plans. If you amended your plan prior to August 2014, it is likely that the PPA restatement is required. Give our team a call, and we will review your plan and let you know. We don’t want you to restate unless it’s required or necessary.

Q: We made some changes to our plan’s legal documents; does that satisfy the six-year requirement?

It depends on what changes were made, and when your plan was changed. However, since the PPA Restatement was introduced recently (in the middle of 2014), it means that you will most likely still have to restate your plan.

Q: There are no participants in the plan. Do I still need to amend the plan?

Yes, you still need to amend the plan. The IRS requires the PPA Restatement regardless of the activity in your plan, even if there is no activity or participants in the plan.

Q: I have to amend the plan sponsored by my company. Can you help me understand what this means?

This requirement is not subject to your plan’s effective start date, contributions to plan or participants. It is solely addressing your Plan Documents and whether they are compliant and operating under the current rules set forth by the IRS.

Q: Our plan is supposed to be closed. Do we still have to do this?

Yes. Regulations require that your plan adopt all required restatements and amendments before your plan can be closed.

Q: The documents say this PPA is to be executed every 5-6 years. Our plan is only a year old. Is it mandatory at this time, or can we wait?

This requirement is not subject to your plan’s effective start date, contributions to plan or participants. It is solely addressing your Plan Documents and whether they are compliant and operating under the current rules set forth by the IRS.

On average, the IRS opens a restatement period every 5-6 years. With every restatement, employers are given a “restatement window,” a two-year period which allows time for making the necessary amendments. The deadline for this restatement period is April 2016, so you have until then to make amendments.

Q: Our business location has not opened its doors yet, so is the PPA Restatement required of our plan?

Yes, the PPA Restatement is required.

Q: Do I really need to do the PPA restatement amendment if I just set up my account last year?

Yes, the PPA restatement amendment is not subject to a start date, even if you set up your account recently. The IRS gives you a two-year window, during which time you need to complete the restatement. This is an IRS regulatory requirement to restate your plan documents so they are in compliance with IRS regulatory updates.

Q: Is the PPA Restatement voluntary or required? Do I have the choice? What happens if I do not do it?

It is a mandatory requirement to be in compliance with IRS regulations. It is not voluntary. If you choose not to amend your Plan during this restatement period, it will be out of compliance with regulations and will lead to assessment of penalties by the IRS.

Q: We could use some guidance on what, if anything, our Plan might need in the way of amendments. Any assistance you can give us will be greatly appreciated.

We are happy to review your Plan and help you to make amendments if need be. Leading Retirement Solutions has received a favorable opinion letter from the Internal Revenue Service (IRS) for its prototype plan document, as restated for the PPA. The restatement to, and adoption of, all preapproved plan documents must be completed no later than April 2016.

If you are interested in working with us, we will be offering a discounted rate of $600 through Dec 1st, and we will also be sending out another discounted in 1-2 months. It will be a lesser discount of $200 off of the full price of $1,000.

 

 

 

 

 

 

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