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DC plan did not restate for Cycle 3

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In general I do not work with/accept take overs unless all is in good order.

A CPA friend of mine asked to take over a plan that did not restate for cycle 3. I will need to help out.

401k/PS plan established in 2014 using PPA document. It is a pre-approved document. Calendar plan.

Cycle 3 was due 7/31/2022 and not done. also, no interim amendments were done/provided.

Reading RP 2021-30 for SCP and trying to determine if can be a SCP and also if within permitted time frame.

  • Under section 4.1.b, looks like a plan document failure
  • Under section 9.2, have up to 3 years to correct

The restatement would be done using a pre-approved document and completed by end of February 2024.

Am I correct or missing something here?


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As an addendum, to make sure I am understanding correctly that I can do the restatement prior to 12/31/2024, I found below from the IRS website. The plan in question satisfies all conditions.

Am I wrong or missing anything?


Correction programs available:

Self-Correction Program

Some, plan document failures may be corrected on or after April 19, 2019 under SCP if certain conditions are met. The conditions are:

  • Plan document failures must be corrected within the two-year correction period specified in Rev. Proc. 2021-30, section 9. The failure begins in the plan year that includes the end of the applicable remedial amendment period.
  • Plan must have a favorable letter as defined in Rev. Proc. 2021-30, section 5.01.
  • SCP is not available to correct a failure to timely adopt an initial IRC 401(a) plan document.
  • Corrective amendments to resolve demographic failures that were not timely adopted are not eligible for SCP and must be resolved under VCP or Audit CAP.
  • The late adoption of discretionary amendments is not considered a plan document failure.
  • Refer to Rev. Proc. 2021-30, sections 4.01, 4.03, 4.04 and 4.05 for program eligibility requirements.

Example 1: The Carrot Stick Company has sponsored a 401(k) plan since 1997. They use a pre-approved plan document. On May 3, 2019 the plan sponsor realized that they failed to timely amend their plan for EGTRAA by the April 30, 2010 deadline and for PPA by the April 30, 2016 deadline respectively. The EGTRRA document was adopted on June 30, 2015 and the PPA document was adopted on December 5, 2018. Can these failures be considered resolved under SCP per Rev. Proc. 2021-30?

The answer is no. The failures can't be resolved under SCP. The correction of the failures occurred before April 19, 2019, the effective date of the revenue procedure. Prior to April 19, 2019, the correction of these failures needed to be accomplished using VCP or Audit CAP. Even if the failures had not been corrected, they would still be ineligible for SCP under Rev. Proc. 2021-30, because correction would occur after the end of the 2-year period for correcting significant failures under SCP. That period would have ended on 12/31/12 for the EGTRRA failure and 12/31/18 for the PPA failure.

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