top of page

Retirement Plan News U Can Use IRS Opens Up Restatement Window for 403(b) Plan Documents, Affects

Updated: Feb 12, 2019

By: Mark A. Gajowski II, CFP®, CLU®, CEBS®, AIF® Founder & Principal, Magii Pension Services, LLC

So you may be asking yourself – why should I care about whatever a “restatement window” is? That is an excellent point and perhaps a good jumping off point to explain in brief summary how a retirement plan works and why this matters.

First, in order for an employer to have a plan for employees to save and invest for their future years, a formal “plan document”, which is the legally binding agreement and governing instrument, must be drafted. Typically, this is done in conjunction with input from your accountant, financial advisor and usually drafted by a Third Party Administration firm, like ours at magii pension services. The retirement plan document contains important and required legal language as well as some practical points, such as who is eligible to participate. Is there an employer match, if so – how much? Who are the trustees a/k/a “fiduciaries” of the plan whom I will state have a personal (yes, personal) financial responsibility for making sure the plan is run legally and properly. An important part of having plan documents is a requirement to have a shortened (and more readable) version, typically know as a Summary Plan Description “SPD”, to be shared with plan participants annually or when requested.

Now that we covered why you need a plan document, why is the government getting involved in making you update it? Well, in simplest terms, all plan documents must be updated to reflect legislative and/or regulatory changes that may have been added on over previous years in small iterations. In most instances plans do not adopt the various provisions; although they all are supposed to as it is required. That said, the IRS catches and corrects this by periodically mandating that all plans be completely re-written (re-papered). Collectively, this process is known as restating the plan, and it happens about once every 5 to 6 years.

As the IRS controls all aspects of the restatement process applicable to qualified retirement plans, including the timing of required restatements, the recently announced time frame, or cycle, for restating pre-approved defined contribution plans is open for all ERISA 403b plans, and will extend until March 31, 2020. This means that all plans must be restated to reflect the legislative changes up through those implemented with the Pension Protection Act of 2006 (PPA) no later than the March 31, 2020 deadline. Failure to restate a plan document could potentially disqualify the plan under IRS regulations, potentially subjecting employers and employees to significant tax consequences.

Ok, so enough about the legal aspects of all this… where is the benefit? Well, there are always opportunities when we look for them. That said, we believe that this provides an excellent opportunity to give your plan a second-opinion review…to check all the plan provisions, eligibility, and features therein. Is your retirement plan meeting your organizations goals as part of your recruiting and retention program?? Is it helping you reward your employees?

If you don’t know, you should, and now you can!

To help our non-for-profit partners, magii pension is again proud to offer our “2nd Opinion” review service. This aptly named solution allows you to have us review your document provisions and your plan features, at no charge; effectively an expert and fresh pair of eyes to review your plan.

To take advantage of this offer, please visit or call 631-434-8200x 28 for instructions on how to upload your document to us for review.

Until we chat again – continued success in your goals and thank you for making Long Island such a wonderful place to live!

38 views0 comments


bottom of page