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Can a PPA restatement be effective January 1 2014?


Lori H
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As long as you don't have mid-year safe-harbor amendment issues or the usual allocation cutbacks for folks who have already met allocation conditions I don't see why not.

I'm sure we did something similar on EGTRRA restatements back to 1/1 the year IRS issued opinion letters and we've terminated several of them since with favorable IRS DLs and never a question for the IRS on the effective dates.

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You can restate a plan with an effective date prior to 2010 (i.e. 1/1/2007) if you like; as long as the "Restatement" doesn't involve a change in the actual written plan terms during that period. A "restatement" doesn't involve an amendment; it is only the drafting of the written plan onto a new document.

An "Amendment", however, is an actual change of the plan's written provisions. This is where a retroactive date may become an issue; if you were actually changing a plan provision.

As a safety precaution, I would state with a forward date (e.g. January 1, 2015) in the event I accidentally change a plan provision. Doing this would ensure a compliance issue isn't 'automatically' created. But, I never sweat it in the event I restate with a retroactive date; as I take the time to ensure there aren't any change in the plan's actual provisions when doing so.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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assuming the plan has a last day provision for profit sharing, you could change the formula. but if the plan only required 1000 hours, then at this point in the game, someone has probably already met the requirements under the old formula and you can't take that away. as someone else noted above, if the plan is a safe harbor you aren't suppose to change anything until a new year starts.

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