Compliance Corner: Q2 2024 – Deadlines, Restatements & ERISA Requirements
UPCOMING DEADLINES
Our administrators are finalizing 2023 plan year tasks for calendar-year plans. If your Plan Administrator has requested info, please respond promptly to ensure timely compliance.
Key upcoming deadlines:
June 30 – ADP/ACP refunds for EACA plans to avoid 10% excise tax.
July 31 – File Forms 5500 & 5330 or request extension (Forms 5558/8868).
September 15 – Final contributions due for money purchase/defined benefit plans.
October 1 – Begin issuing 2025 plan year notices (e.g., safe harbor, QDIA).
October 15 – Form 5500 due (if extended).
January 31 (2025) – Form 5330 due (if extended).
CYCLE 3 RESTATEMENT: DEFINED BENEFIT PLANS
Even as summer starts, plan sponsors can’t rest yet. The Cycle 3 Restatement process for defined benefit plans is underway. Your Plan Administrator will contact you directly if your plan is affected.
Why do you need to restate?
Every six years, pre-approved plan documents must be updated per IRS rules. Even if your plan was recently adopted, restatement is mandatory for compliance. Failure to restate can compromise the plan’s IRS-qualified status.
Deadline to restate: March 31, 2025
What's new in the restatement?
Updated documents include:
Hybrid plan rules
Natural disaster relief provisions
SIMPLE IRA rollover language
Clarified provisions and improved plan language
Most plans will see no change to their benefits, but the process does require review and signature by the Plan Sponsor.
PLAN BOND RULES: ARE YOU COVERED?
Section 412 of ERISA requires anyone handling plan funds to be bonded. This protects plans from theft, forgery, or embezzlement.
Key takeaways:
General liability or D&O insurance doesn’t qualify as a bond.
A bond must equal at least 10% of plan assets, up to $500K ($1M if employer stock).
Some fiduciaries and plan types (like solo 401(k)s or church/government plans) are exempt.
Failing to secure proper bonding may result in audit risk and fiduciary liability.
PLAN RECORDKEEPING: WHAT TO RETAIN & FOR HOW LONG
Plan Sponsors are required to retain documents for at least six years, and in some cases indefinitely. Digital isn’t always enough—wet signatures should be saved.
Retain indefinitely:
Adoption agreements, plan documents, IRS letters
Employee communications & safe harbor notices
Participant benefit and distribution records
Service provider contracts
Retain at least 6 years:
Government filings (Forms 5500, 8955-SSA)
Compensation and hours worked
Plan testing documentation
Participant elections and account history
Adopt a record retention policy and do not rely solely on third-party service providers to store plan records. Ultimately, the responsibility lies with the Plan Sponsor.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice.
Written by: Sam Dart, on behalf of Hunnex & Shoemaker