 NEWSLETTERS Volume 1, Issue 1 .................... April 2000 Time to Restate Your Retirement Plan In order to have a qualified retirement plan, a plan sponsor must have a written plan document. The document consists of the current Internal Revenue Code regulations at the time it was drafted. With each new tax act, congress, in its infinite wisdom, usually changes the retirement laws. Retirement plan sponsors are required to amend their plan to comply with changes made by the following tax acts: Uruguay Round Agreements Act, Pub. L. 103-465 (GATT); Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353 (USERRA) Small Business Job Protection Act of 1996, Pub. L. 104-188 (SBJPA); and the Tax Relief Act of 1997 (TRA ‘97). All four tax acts are known as GUST. What this means to all plan sponsors is that they will have to restate their retirement plans to include the language of these tax acts. Administrative Retirement Services, Inc. believes that this is an opportunity for plan sponsors to review their current plan provisions and make significant changes to enhance their existing retirement plan. In January the IRS released Revenue Procedure 2000-20 which opens the GUST prototype program April 7, 2000, for National Prototype sponsors. Plan sponsors must amend their plans within twelve months from the date the prototype sponsor receives an opinion letter to adopt the prototype. GATT and SBJPA made a number of changes to the plan qualification requirements. Many of these changes are already in effect for most plans, while other changes do not take effect until plan years beginning after December 31, 1998 or December 31, 1999. TRA ‘97 also made several changes to the qualification requirements. The TRA ‘97 changes are generally effective for plan years beginning after December 31, 1997, but certain changes are effective for plan years beginning after the date of enactment of TRA ‘97, August 5, 1997. Two important changes made by SBJPA are: A Nondiscrimination rules: simplifying the definition of “highly compensated employee” and repealing family aggregation. A Simplified nondiscrimination rules under section 401(k) and 401(m). Administrative Retirement Services, Inc.
will be sponsoring a prototype plan. We anticipate the restatement process
to begin in early 2001.
© Administrative Retirement Services, Inc. 2000 Published by Administrative Retirement Services, Inc., Copyright 2001 by Administrative Retirement Services, Inc. Reproduction in whole or in part is prohibited except by written permission. All rights are reserved. Information has been obtained by Administrative Retirement Services, Inc. from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Administrative Retirement Services, Inc. or others, Administrative Retirement Services, Inc. does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Readers should seek specific advice before acting with regard to the subjects mentioned here. |