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Employee Benefit Services

Cycle 3 Restatement July 31 Deadline: What You Need to Know

At a Glance

Main Takeaway

The Internal Revenue Service (IRS) requires companies to restate their qualified retirement plans every six years. This action allows employers to integrate any regulatory or legislative changes since the last restatement process.

In 2020 the IRS cycle 3 restatement process was announced, giving employers until July 31, 2022, to update their retirement plan documents.

Next Step

Learn from Windes what steps your business must take, which retirement plans are affected, and the impact of retirement legislation on this restatement cycle.


What is Plan Restatement?

Documents for pre-approved retirement plans must be rewritten, granted approval by the IRS, and adopted by employers every six years. This process is called plan restatement. Its main objective is to rewrite the plan’s language to add voluntary discretionary changes, enhancements, or statutory changes since the last restatement period.

These IRS-mandated updates can help your retirement plans run efficiently and earn more value for your employees.

The IRS can disqualify your employer retirement plan if you fail to meet the deadline, leading to the loss of some tax benefits. Even if your company recently established a new retirement plan, you may still need to go through restatement.

Retirement Plans Included in Cycle 3

The IRS has separate cycles for different types of retirement plans. The cycle 3 restatement period for defined contribution (i.e., profit sharing, 401(k), money purchase pension) plans started on August 1, 2020, and closes on July 31, 2022. Employers must restate their defined contribution retirement plans by the deadline or face penalties for non-compliance.

Defined benefit pension, cash balance plans and 403(b) plans have different cycles than defined contributions plans.

The third-party administrator (TPA) for your company’s retirement plans may have already contacted you or provided documents needed for your restatement. If not, you will need to obtain the relevant documents to amend your defined contribution plan. Your TPA may have also provided instructions on how to complete the restatement.

Impact of Recent Legislation

You may be concerned about how recent legislation amending and expanding retirement plans and benefits impacts your restatement. The CARES Act and the SECURE Act were passed into law within the last six years of this cycle. The IRS cycle 3 approval letter only considers guidance, statutory, and legislative changes that occurred before February 1, 2017.

Since the SECURE Act and CARES Act were passed after this date, the new regulations, including hardship distributions, are not included during this cycle. Your business must address this through good-faith amendments to account for changes in these two bills instead of including them in your restated plan document.

Get Help with Your Cycle 3 Restatement

Updating your employer retirement plans can be challenging, but the professionals at Windes can help. Our Employee Benefits Services (EBS) team partners with you to ensure your employee benefit plans are cost-effective and qualify for favorable tax treatment.

We confirm compliance of your retirement plans with rules and regulations from the IRS, Department of Labor, and ERISA while supporting your business objectives. Our team can help you meet the cycle 3 restatement deadline of July 31, 2022.

Contact our Los Angeles or Orange County office today to learn how we can help your company remain in compliance.

Therese Cheevers
Therese Cheevers, APA, ERPA

Partner – Chair, Employee Benefit Services
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