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Retroactive Amendment after Restatement


C. B. Zeller

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The effective date of a restatement is generally the first day of the plan year in which the restated document is adopted. However a retroactive amendment, particularly an -11(g) amendment, can be effective back to the first day of the prior plan year provided it is adopted in time. For example you could adopt a restatement in April 2019, effective 1/1/19, then adopt a corrective amendment in September 2019 effective 1/1/18.

Are there any issues with adopting an amendment with an effective date prior to the effective date of the document being amended?

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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You could.  I would imagine the only point of contention would be the potential of creating an amendment that would take your document out of pre-approved status.  I cannot see that happening with a corrective amendment.

Keep in mind that a restatement does necessarily involve a change in the plan's terms; it's merely writing the plan to a new document.  With that said, it wouldn't be any issue to restate a document going back to 1/1/2018, because there is no change in the language. Then, you would've have to worry about the corrective amendment having an effective date prior to the effective date of your document.  (Not saying that it would be necessary to do that, but may provide for a more consistent reading of plan terms if you're moving from one document to the next.) 

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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19 hours ago, C. B. Zeller said:

The effective date of a restatement is generally the first day of the plan year in which the restated document is adopted. However a retroactive amendment, particularly an -11(g) amendment, can be effective back to the first day of the prior plan year provided it is adopted in time. For example you could adopt a restatement in April 2019, effective 1/1/19, then adopt a corrective amendment in September 2019 effective 1/1/18.

Are there any issues with adopting an amendment with an effective date prior to the effective date of the document being amended?

Answer: NO, so long as the amendment does meet all the criteria of the -11g rules.

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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