Employee Benefits Update: April 30 Deadline for 401(k) Plan Actions
By Cindy Van Bogaert
April 5, 2010
Here is your latest Employee Benefits Update from Cindy Van Bogaert, Partner and Chair of the Employee Benefits Practice Group at Boardman Law Firm LLP. This Employee Benefits Update addresses 401(k) plan revisions and IRS determination letters for plans using a mass produced document format (sometimes called "pre-approved" documents). (How do you know if your plan is pre-approved? It may include language in the document calling it a "prototype" or "volume submitter" plan. Often, these plans have fill-in-the-blanks Adoption Agreements.)
What do employers need to know?
- Timing of amendments is critical. 401(k) Plans need to be updated for law changes by the dates established by the IRS. There is a deadline for adopting updates to pre-approved plans - generally, April 30, 2010. Plans that are not timely amended could face significant penalties.
- It is not just the timing, but the content that matters. 401(k) Plans must be properly amended. An IRS determination letter provides a plan with protection against future challenge of the content of the plan amendments. Even though the pre-approved plan itself should have an IRS "opinion" or "advisory" letter, in general, I strongly recommend that a plan using such a document request a determination letter to have this protection for the plan. April 30 is an important determination letter filing deadline for many plans. See http://www.irs.gov/retirement/article/0,,id=97213,00.html. Be aware that notices to interested parties, such as certain employees, may be required 10 days prior to the April 30 deadline.
What should employers do?
- If you have a pre-approved document, contact your document provider to make sure that any April 30 deadline amendments are made. Work with your attorney to review the amendments.
- If you have a pre-approved document, contact your document provider to ask them to file a Form 5307 (or other appropriate form) for an IRS determination letter. Work with your attorney to draft or review the determination letter filing. Advance notice to employees is typically required.
Please contact me if I can be of assistance.
Upcoming seminars:
- "Wrap Documents for Health and Welfare Plans," for the Employee Benefits Institute of America on April 15, 2010. For information: http://www.ebia.com/WebSeminars/ERISA/Intermediate/20122.
- "HIPAA Portability, Privacy & Security," for the Employee Benefits Institute of America in Baltimore, MD on April 22, 2010. For information: http://www.ebia.com/Seminars/InPerson.
- "HIPAA Privacy Heats Up," at the Midwest Claims Conference in Lake Geneva, WI on May 6, 2010.
- "How Health Care Reform Affects Employer Group Health Plans" Seminar in Madison, WI on May 18, 2010. For information: click here.
- "Fiduciary Responsibility," at Wisconsin Retirement Plan Professionals, Ltd in Milwaukee, WI on May 27, 2010. For contact information: http://wrppl.org/Home/tabid/88/Default.aspx.
- "HIPAA Privacy: Tougher Rules; Tougher Enforcement," at the Society for Human Resource Management (SHRM) Annual Conference & Exposition in San Diego, CA on June 28, 2010. For information and to register: http://www.shrm.org/CONFERENCES/annual/Pages/default.aspx.
- "401(k) Plans" Seminar in Madison, WI on September 14, 2010. For information: click here.
- "HIPAA Training" covering the basics and new developments such as HITECH on October 26, 2010. If you work with employer health benefits, you should consider this training seminar to meet your legal obligations. For information: click here.
This FYI is not legal advice. Individuals should seek advice based on their particular circumstances from their own counsel.
If you have any questions or need assistance, please contact Cindy Van Bogaert at (608) 283-7543 or Email.
Would you like to have FYI: Employee Benefits Update sent directly to your e-mail inbox? If so, please send your request, with e-mail address, to Cindy Van Bogaert at Email.
