The end of 2012 is coming up fast and sponsors of single-employer retirement plans must make sure they are in compliance with all new statutory and regulatory requirements.
Milliman issued a client brief looking at what needs to be done by the end of the year, including reviewing plan documents and amendments, like the benefit restriction provisions included in the 2006 Pension Protection Act.
"Plan sponsors generally adopted PPA amendments in 2009, but may or may not have adopted the benefit restriction provisions because the IRS provided for a delay," the bulletin stated. Milliman recommends that sponsors who have included the benefit restriction provisions in their PPA amendments may want to adopt the IRS model language as a safe harbor. "In the long run, adoption of the IRS model language may save sponsors time, effort and expense in the event of an audit or during the determination letter process," the report said.
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The deadline for adopting a plan amendment for the benefit restriction provisions is the last day of the 2012 plan year.
The organization also recommended that plan sponsors review whether required amendments relating to prior plan years have been properly adopted and executed and if operational changes were made during the current plan year, the amendments should be adopted by Dec. 31.
If a plan sponsor discovers it has failed to adopt a plan amendment, it should consider correcting the mistake through the IRS's Employee Plans Compliance Resolution System (EPCRS). In many cases, EPCRS' standard filing fees are reduced for a failure to adopt either required or discretionary amendments, Milliman stated.
Sponsors of defined contribution plans need to provide by Dec. 1 a 401(k) safe harbor notice, an automatic enrollment notice and a qualified default investment alternative notice. DC plans that allow participant-directed investments must issue a statement relieving the plan sponsor of liability for certain losses resulting from participants exercising their rights and notify them of the availability of investment advice services by Dec. 31, if they didn't include this type of notice in their summary plan description.
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