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PPA Restatement Cycleftwilliam.com November 7, 2012
Presented By:Aimee Nash Holly Roussel-Godfrey
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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
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Restatement Cycle Basics
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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
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Timeframes1. 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?
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What's New for the PPA Cycle (IRS Requirements per Rev Proc 2011-49)
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Summary of Changes Differences between vol subs and prototypes
narrowing Interim amendment certification requirement Not much else
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Prototypes vs. Vol SubsPrototype Volume Submitter
Document format Adoption 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'
Hardship Safe harbor only Safe harbor or non-safe harbor permitted
Participant waiver/ Irrevocable opt-out
Not permitted Permitted
Cross-testing – each participant in his own group
EGTRRA: number of groups limited by number of NHCESPPA: works same as volume submitters
No limit on number of groups
Multiple Employer Plan EGTRRA: not permittedPPA: permitted
Permitted
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Interim Amend Certification New requirement for PPA (Rev Proc
2011-49) 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
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Interim Amend Certification
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ftwilliam.com PPA Documents
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ftwilliam.com PPA Cycle Documents Offered Prototype - nonstandardized plans
401(k)/Profit Sharing 401(k)/Profit Sharing Answers Only Money Purchase Target
Prototype - standardized plans 401(k)/Profit Sharing 401(k)/Profit Sharing Answers Only Money Purchase
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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
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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
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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
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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:"
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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."
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Document Language Walk Through
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Caveats Document is not yet approved We are showing a *DRAFT* document
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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
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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
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Document Highlights - 3 Paid time off option (rev procs 2009-31/32) 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
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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
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Answers Only Option Example1. 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.
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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."
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Pre-release program Current customers can access draft PPA document
from website Prospective customers – contact [email protected] Participants can review draft copies of the VS prototype
format and suggest improvements and possible new features.
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Should I Get a Letter in My Own Name?
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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
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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
http://www.ftwilliam.com/articles/FAQsNextCycle.html for details
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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)
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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)
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How Do I Apply For a Letter in My Firm's Name? Items needed (email [email protected])
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
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Ftwilliam.com Product Offerings for PPA Cycle Software Features
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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
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Current Software Features Batch amendments/Annual Notice Portal product
integration with batch amendments/annual notices
e-signature Live demonstration will follow power point
presentation
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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