Five Things You Need to Know to Help You Prepare for Plan Restatement
The restatement process for pre-approved plans —formerly called “volume submitter” plans—is scheduled to begin within the coming months. To help you prepare, we want to ensure that you have a good understanding of what plan restatement entails, your responsibilities, and how Fidelity will help to ensure that you have a successful plan restatement.
The IRS has issued an Opinion Letter for the Basic Plan Document, Adoption Agreement and Appendices provided for your plan during this restatement cycle. This pre-approved document was drafted by Fidelity as the plan document provider. Prior to this restatement cycle, Fidelity as a volume submitter practitioner offered a version of a pre-approved plan document to plan sponsors. As a result of your transition to a Fidelity drafted plan document, many provisions in the restated plan document have moved to a different location within the document. With the delivery of your restated plan document, Fidelity will provide a Document Guide which is an easy-to-follow guide that maps the current location of provisions to the new location in the restated plan document.
1. What is a plan restatement?
Restatement is the process through which you adopt a new pre-approved plan document that has been updated with required amendments, regulatory changes, and other enhancements. Restatement is required by the Internal Revenue Service (IRS) every six years to maintain your plan’s pre-approved status.
2. What is the process to complete a plan restatement?
To help you through your plan’s restatement:
- You’ll receive an email from Fidelity 30 to 60 days before your plan restatement window begins to let you know when to expect your draft documents.
- Fidelity will provide you with your draft documents—including your Adoption Agreement, Basic Plan Document, and Appendices
- You will have the opportunity to review the draft documents with your counsel and other necessary parties prior to receiving the final documents for execution and return to Fidelity.
- Once you have completed your review of the draft documents, contact Fidelity to let us know:
- If your drafts are correct and complete and you are ready to receive final documents for proper execution and return – OR-
- If your drafts require revisions before they are finalized for execution and return
- Once Fidelity receives notification that your documents are correct and complete, the final documents will be provided to you for execution and return to Fidelity
- After execution, you will receive a confirmation email with a copy of the executed Adoption Agreement to download for your records
- Based on our experience, the entire restatement process typically lasts no more than 90 days
3. What are your next steps?
The first step to prepare for your 403(b) plan document restatement is to align resources, both internal and external, needed to review, approve, and execute the 403(b) plan document. These resources may include:
- Investment professionals and/or consultants
- Legal counsel and/or tax advisors
- Employees responsible for the review of the restated plan document. Generally, these employees are most familiar with the details of the current 403(b) plan design
- Any party responsible for executing the restated 403(b) plan document (e.g., Board of Trustees, committee members, or other staff members)
4. What is your responsibility?
Your responsibility as an employer is to carefully review, approve, and adopt the required documents within the required time frame. Fulfilling these important responsibilities is critical to avoid significant risks and potential liabilities, which may include:
- Potential corrective action under the IRS Employee Plans Compliance Resolution System (EPCRS) Program.
- Potential loss of your plan’s pre-approved status and reliance on its opinion letter.
We are here to help you through the process, at no additional charge. We’ll take the first step by preparing your pre-approved plan documents and reminding you of key deadlines along the way.