The Clock Is Ticking on 2017 Compliance Steps
Ritual marks the onset of a new year — but it’s not just about revelry and pageantry. It’s also about making sure plan-related duties that are on a calendar-year timeline are fulfilled in time.
In a recent blog post, the Snell & Wilmer law firm provides a reminder of what needs to be done before the ball drops. They suggest that 403(b) plans should take the following steps.
A 403(b) plan and its administrators should remember that generally, a plan must be amended by the last day of the 2017 plan year to reflect and changes that were made to its design. Also, employers that wish to add an ACP contribution safe harbor to their 403(b) plans for the 2017 plan year must adopt an amendment by Dec. 31, 2017 for calendar year plans.
In addition, Snell & Wilmer write, 403(b) plans that are subject to ERISA must:
- update Summary Plan Descriptions (SPDs) once every 10 years, and once every five years if the plan has been amended during the five-year period;
- distribute a Summary Annual Report (SAR), which generally is due nine months after the plan year ends — and if the plan received an extension for filing the Form 5500, the SAR must be distributed by two months after the date on which the Form 5500 was due;
- provide individual benefit statements at least once a year and upon request; those that allow participants to direct how their accounts are invested must provide benefit statements at least quarterly; and
- comply with the rules for filing a Form 5500, including an annual plan audit for plans with 100 or more participants and detailed financial information for those plans with fewer than 100 participants.
Snell & Wilmer also suggest that a 403(b) plan consider amending the plan to document disaster relief the IRS provided:
- The IRS provided such relief in 2016 for individuals affected by storms in Louisiana and Hurricane Matthew. The IRS permits employers to offer hardship distributions and loans for such individuals even if their plans did not provide for them. Employers who do so must amend their plans to allow for hardship distributions and/or loans by Dec. 31, 2017.
- The IRS also provided disaster relief in 2017 for individuals affected by Hurricanes Harvey, Irma and Maria and by the California wildfires. Employers that offer qualified hurricane distributions or loan relief to participants must amend their plans by Dec. 31, 2019 to make the necessary changes.