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Posted

If a DB plan has already been amended for PPA and is terminating now, prior to the end of the PPA restatement period, and before our document provider has the PPA documents available, does it still need to be restated for PPA?

Posted

This is from Relius, you may want to check with your document provider:

Does a terminating Defined Benefit plan need to be restated onto the PPA approved document prior to being terminated?

Plans do not need to be restated for PPA, even when being submitted to the IRS for a determination letter upon termination using Form 5310. If, however, a currently pre-approved plan is not being submitted to the IRS for a determination letter on plan termination, then we recommend the pre-approved plan be restated onto one of the PPA pre-approved documents. This way the employer can be assured the plan language satisfies the changes made by PPA (and the other changes in the law that are included in the PPA document). If the plan is not restated, then there is no reliance on the interim good-faith amendments that had been adopted and this could be a problem upon an IRS audit (if the auditor finds any defects in those good-faith amendments). In contrast, plans that are currently not pre-approved, such as any cash balance plan, continue to have reliance on any determination letter issued to the plan only to the extent provided by IRS Revenue Procedure 2016-37, so it is not so clear that such a plan should be restated prior to termination. Employers that wish to wait for a PPA preapproved document may want to push back the termination date because the last day to amend a terminating plan is the date of plan termination.

 

PensionPro, CPC, TGPC

Posted

the plan has to be brought current at time of termination.  Restating is often the easiest way to do that.  But your doc provider likely also has a "termination package" that includes all the most recent updated required language.

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