Agenda A few Basics About Restatement Cycles and Pre- Approved Plans What's New for the PPA Cycle? ftwilliam.com Product Offerings for PPA Cycle – Doc types Do I Need a Letter in My Own Name? Ftwilliam.com Product Offerings for PPA Cycle – software features/Demos Batch restatements E-signature/portal/workflow Other upcoming enhancements
Restatement Cycle Basics
Restatement Cycle All pre-approved qualified defined contribution plans are on the same 6 year restatement cycle Pre-approved DC plans last had to restate for EGTRRA by April 30, 2010 DB and 403(b) plans are on a different cycle Pre-approved DB plans must have restated for EGTRRA by April 30, 2012 403(b) plans cycles - yet to be determined
Timeframes 1.ftwilliam.com submitted draft documents to IRS April 2, 2012 Content of docs is determined by 2010 LRMs 2.IRS reviews documents – expected completion 2014? 3.Deadline to adopt PPA docs - early 2016?
What's New for the PPA Cycle (IRS Requirements per Rev Proc )
Summary of Changes Differences between vol subs and prototypes narrowing Interim amendment certification requirement Not much else
Prototypes vs. Vol Subs PrototypeVolume Submitter Document formatAdoption agreement and basic plan document All-in-one document or adoption agreement ("prototype") format Modifications to pre- approved language Plan becomes individually designed Most changes are 'minor modifications' HardshipSafe harbor onlySafe harbor or non-safe harbor permitted Participant waiver/ Irrevocable opt-out Not permittedPermitted Cross-testing – each participant in his own group EGTRRA: number of groups limited by number of NHCES PPA: works same as volume submitters No limit on number of groups Multiple Employer PlanEGTRRA: not permitted PPA: permitted Permitted
Interim Amend Certification New requirement for PPA (Rev Proc ) Required now for applications for letter in own name This certification will be required of all ftwilliam.com customers – even if no opinion/advisory letter
ftwilliam.com PPA Cycle Documents Offered Volume Submitter plans 401(k)/Profit Sharing AA format 401(k)/Profit Sharing AA format Answers Only Profit Sharing Governmental Plan AA format (no 401(k) provision)* Money Purchase Governmental Plan AA format* 401(k) IDP format Profit Sharing IDP format Money Purchase IDP format
Governmental Plans If you have individually designed governmental plans coming to end of 5- year cycle, use 8905 to bridge to PPA Wolters Kluwer/ftwilliam.com does not have mass submitter status – must use our advisory letter for governmental volume submitter documents
Prototype or Vol Sub? We generally recommend Volume Submitter in prototype format. Checklist nearly identical to NS proto (only differences are those required by the IRS – Proto NS is generally not "simpler") Differences weigh in favor of Vol Sub (minor mods and non-safe harbor hardship option) Prototype format easier to read
New AA Document Format – applies to all plans w/ AA Each question now has a heading. Sub-questions are now indented. More descriptive words instead of question numbers. Instead of: "The exclusion listed in B.1a for union employees applies for the following purposes:" New style: "The union employees exclusion listed above applies for the following purposes:"
New AA Document Format Cont. Technical information removed from the question. Instead of: "If B.4a is selected, describe other excluded Employees from definition of Eligible Employee and indicate for what purposes (e.g., Elective Deferrals, Matching, etc.) the Employees are excluded: ______" new style: "Other Employees: ______" "NOTE: If selected, describe other excluded Employees from definition of Eligible Employee and indicate for what purposes (e.g., Elective Deferrals, Matching, etc.) the Employees are excluded."
Document Language Walk Through
Caveats Document is not yet approved We are showing a *DRAFT* document
Document Highlights - 1 No amendment to update company information "Testing Compensation" now called "Statutory Compensation" to help clarify not used for ADP/ACP but 415, HCE/Key and top heavy determinations only More "other" options throughout the document Software will allow you to apply the same eligibility rules to all contributions
Document Highlights - 2 New section for safe harbor and elective deferrals (apart from profit sharing / match) Safe harbor match eligibility options now same as non-electives Automatic enrollment per admin policy Allocation service language clarified Amount of Profit sharing now an option New "other" profit sharing formula
Document Highlights - 3 Paid time off option (rev procs /32) Most QNEC language removed to BPD – allocations at plan admin discretion Forfeitures can be set in doc or remain as any permissible method Domestic partner language added (optional) Ability to add custom policy when no beneficiary exists More flexible hardship for certain accounts
Document Highlights - 4 New in-service option age and service Special trustee for purposes of determining and collecting contributions under the Plan Trust administrative modification options
Answers Only Option Example 1.Union Employees a.[ X ] Any Employee who is included in a unit of Employees covered by a collective bargaining agreement, if retirement benefits were the subject of good faith bargaining, and if the collective bargaining agreement does not provide for participation in this Plan. b.The union employees exclusion listed above applies for the following purposes: i.[ ] Elective Deferrals and Voluntary Contributions. ii.[ X ] Matching Contributions. iii.[ X ] Profit Sharing Contributions. Text crossed out above will not appear. If 1.a. was not selected, entire question would not appear.
Answers Only Option Details BPD must include Appendix A showing an entire Adoption Agreement with all applicable text, notes, etc. Answers only AA must include the following statement: "By signing this adoption agreement, the adopting employer acknowledges having reviewed the Appendix A and certifies that all choices reflected in this adoption agreement have been taken from such appendix."
Pre-release program Current customers can access draft PPA document from website Prospective customers – contact Participants can review draft copies of the VS prototype format and suggest improvements and possible new features.
Should I Get a Letter in My Own Name?
No requirement to get a letter in your own name IRS does not require this; recognize "middlemen" that use a vendor's opinion/advisory letter Some document vendors require letter in own name to use their documents ftwilliam.com allows customers to use its letters and/or apply for a letter in customer's name
Do I need to be on a list with a vendor? If you had a letter in your own name for the EGTRRA cycle, you should consider getting a letter in your name for PPA If you had no letter last cycle, you certainly do not need a letter for PPA – there's no "list" applicable If you apply for a letter with one vendor – you can change your mind for details
Advantages of having letter in your own name You can use your company name on the document (instead of Wolters Kluwer or leaving blank) You can amend plans that use your letter on behalf of the plan sponsor (you can choose your own default amendment or apply different defaults to different plans)
Dis-advantages of having letter in your own name You must amend plans using your letter for default provisions (ftwilliam.com signed default amendment will not apply)
How Do I Apply For a Letter in My Firm's Name? Items needed ( Order Form 2848 Certification regarding interim amendments Payment ($300 per doc type) Applications with another vendor can be transferred if letters have not yet been issued No firm due date for these applications – prior to 2014 is best
Ftwilliam.com Product Offerings for PPA Cycle Software Features
Restatement Process "Click of a button" restatement Answers from prior document will map Any new questions can be defaulted Conversions can be batched into groups If no changes during restatement, no data entry required to restate
Current Software Features Batch amendments/Annual Notice Portal product integration with batch amendments/annual notices e-signature Live demonstration will follow power point presentation
Other Anticipated Software Features Enhancements to edit checks and data entry of checklists Customizable documents, SPDs and forms Add logo (to forms/spds) Choose margins, spacing between paragraphs, etc. Add custom language Reporting enhancements Workflow / practice management Multiple Employer plan software solution Fullfillment options for restatements, amendments and annual notice – Wolters Kluwer prints and mails