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Six-Year Deadline for Retirement Plan Sponsors Comes Up in 2016 by Sean Deviney, CFP

Posted on February 11, 2016 by Richard Berkowitz, JD, CPA

Businesses that sponsor pre-approved 401(k), profit-sharing or other defined contribution (DC) retirement plans, must sign and adopt restated plan documents that comply with IRS-approved wording by April 30, 2016. Doing so will ensure the plans continue to qualify for tax benefits.

 

Sponsors of pre-approved prototype and volume submitter retirement plans typically purchase their plans from financial institutions, third party administrators or similar providers, who are required to update their plans every six years. These providers should have already sent to employers sponsoring pre-approved retirement plans the IRS-approved plan documents that have been updated to comply with changes in the law. Employer who have not yet received pre-approved defined contribution plan restatement should contact their providers immediately.

 

This mandatory restatement is an ideal time for businesses to evaluate the current provisions in their retirement plans. Provisions put in place years ago may no longer be optimal for a company and its employees today. Items to consider are the plan’s eligibility requirements, entry dates, automatic enrollment, vesting schedule, matching or profit sharing formula and Roth availability.

 

With the April 30 deadline around the corner, employers should be in the midst of planning to submit their determination letters as soon as possible. The professionals with Provenance Wealth Advisors work with businesses of all sizes, through start-ups, mergers and acquisitions, to design benefits plans and implement best practices to meet regulatory compliance and serve the needs of plan sponsors and participants.

 

About the Author: Sean Deviney is a CFP®* professional and retirement plan advisor with Provenance Wealth Advisors, an independent financial services firm that often works with Berkowitz Pollack Brant Advisors and Accountants. For more information, call (800) 737-8804 or email info@provwealth.com.

Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.

Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC.

Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.

* Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

 

 

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