While much of the retirement plan world is understandably focused on the upcoming fee disclosure deadlines, there’s another deadline that’s looming closer. It’s April 30, 2012, the date by which pre-approved defined benefit pension plans must be restated for EGTRRA.

Here are frequently asked questions that should be helpful in helping you understand this important compliance process.

Why do I need to restate my Defined Benefit Pension Plan at this time?

IRS procedures concerning pre-approved Plans require your Plan to be restated in order to remain in compliance with changing rules governing qualified Plans. The restatement incorporates new compliance language into the document that has been pre-approved by the IRS that are reflected in our documents.

Should I file my restated Plan with the IRS?

An employer may apply for a Determination Letter, a document issued by the IRS formally recognizing that the Plan meets the qualifications for tax-advantaged treatment. The IRS has already reviewed the language used in the pre-approved Plans mentioned above. Employers using pre-approved Plans automatically have assurance that the language used in their Plan satisfies the IRS requirements (assuming no changes are made to what was approved).

If you have not changed the pre-approved document language, there is really no need to submit the Plan for a determination letter, but IRS procedures permit you to do so. However, if language changes have been made in the pre-approved document, a determination letter assures you that the custom language is acceptable.

What happens if I fail to amend or restate my Plan on a timely basis?

If you miss the deadline for amending or restating your Plan, then you can avoid Plan disqualification by using an IRS correction program. Under this program, the IRS will require that you pay a sanction and submit an updated Plan. The sanction can vary depending on the circumstances. However, it is significantly higher if the IRS discovers the missed deadline than if you voluntarily go to the IRS when you discover the missed deadline. In addition, there would be the cost associated to update the Plan and prepare the application to the IRS.


It is the responsibility of the plan fiduciary to ensure that the Plan is updated and signed by the April 30, 2012 deadline.