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Patricia Neal Jensen

Restate to Terminate 403(b)? 2018 activity

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In 2018 we will be terminating a 403(b) plan which the plan sponsor has not yet restated for PPA.  The restatement deadline is 2020 so we are within the restatement period but nowhere near the deadline.  Do we have to restate this plan to terminate it?  (The assets will be paid out in 2018; that is not an issue in this case)

Thanks!

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The IRS has always required that a plan be updated for the latest statute and regulations before termination, even if the deadline for other plans has not arrived. The idea is that other plans can be amended retroactively, but there is no opportunity to amend a plan after termination. 

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Wanted to add that what you're calling the PPA restatement is actually the first ever adoption of a 403(b) plan document that carries an IRS pre-approval so I would agree with Carol that adoption of a pre-approved plan document to replace the existing "good faith" document prior to termination is a necessity.

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