Restating Documents

[coleboy]

We have a client whose plan we'll be taking over on 7/1/15. The document that I'll be completing for this client is updated to all the PPA,etc regs. The current TPA is insisting that the client sign the new restated document that they have completed and has an effective date of 6/15/15.

My thought is why sign that document when you will be having a new document just 2 weeks later. Never mind the expense.

Also, why restated documents with an effective date of 6/15?

Any thoughts? Am I missing something?

[Belgarath]

Without knowing facts and circumstances, and assuming plan year is calendar:

Yes, I agree - typically the restatement is effective either 1/1/15, or 1/1/16, or effective 1/1/15 with some provisions not to take effect until 1/1/16, etc...

It may well be that the employer is OBLIGATED to pay for the restatement work already done, under the terms of their contract with prior TPA. I have no opinion on that.

If it is optional, then certainly it makes no sense to restate twice in a few weeks.

[Kevin C]

The only reason I can think of for trying to have a restatement be effective 6/15 is to have a plan change be effective on that date. That can usually be accomplished with a special effective date for the relevant provision, so I would not have the entire restatement be effective 6/15. With the plan leaving them 7/1, I agree it makes no sense to sign the prior TPA's restatement. As mentioned, If the restatement has been completed, they may be obligated to pay for it, but that should't affect whether or not they sign it.

However, if the prior TPA already received payment from the plan for the restatement, or if they are going to bill it to the plan before the funds leave, I think there would be an issue if the plan paid for an unneeded, never signed restatement. For me, the way to fix that would be for the employer to pay the prior TPA's restatement fee, even if it needs to do so by reimbursing the plan.