Defined Benefit Plans Cycle 3 Restatement Info

It’s practically an expectation at this point that the IRS will require your retirement plan document to be restated on a six-year cycle. 401(k) plans went through this exercise in 2020 and now it’s the DB plans’ turn to restate to the current cycle, exotically named Cycle 3! Your DB plan or Cash Balance plan needs to adopt the restated document by March 31, 2025, so you’ve got some time (but not a ton of time).

Did you just set your plan up last year? Sorry, you still gotta jump through the hoop; see if you can catch a break from your TPA to get it restated on the cheap if you don’t change anything. Were you going to terminate your plan, anyway, and are thinking “now’s the time” since you’re tired of the administrative expense? Sorry again; every ERISA attorney I know will recommend you restate your plan before you terminate it. Should have done it last year… Everyone else who’s on board with attending to this document refresh, “What’s in store?” you might ask.Blog 2 2-1

Unlike with the Cycle 3 restatement for 401(k) plans, there are not a whole lot of changes for DB plans this cycle! There weren’t any specific acts affecting DB plans since the last required restatement to PPA in 2018, so here are some of the more notable inclusions you can expect in your Cycle 3 document:

  • Expansion of the definition of “spouse” to include those of the same gender.
  • An IRC 401(a)(26) fail-safe provision which automatically minimizes the cost of compliance to the lowest possible amount
  • A method for matching pay credits to the IRC 415 limit
  • New death benefit options to better accommodate insurance in plans

Happy restating!

Have you been maintaining a DB plan for a long time, now, and this is the first you’ve ever heard of a required restatement? BRI has become quite adept at helping sponsors regain compliance with applicable regulations, so if you have any concerns about your plan, you’re only a phone call or email away from a free consultation and perhaps getting some much-needed solace!


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