Every time Congress decides to change the laws, 401ks and pension plans need to be updated by your 401k administrator. Well, now that Congress has been busy trying to stimulate the economy, we’re now at another time when your 401k administrator will have to update your plan.
If your 401k administrator has given you a pre-approved 401k plan such as a prototype or volume submitter, your 401k plan will need to be updated by April 30, 2010. This critical update is to comply with the laws known as the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). EGTRRA became effective for plan years beginning in 2002.
Besides trying to keep your 401k plan in compliance with EGTRRA, your 401k administrator will be also updating your plan for The Pension Protection Act of 2006 (PPA). Your 401k must be updated for PPA by December 31, 2009.
If you thought that two updates were enough, just wait; your 401k administrator is not done. Your 401k administrator will also have to update your plan for The Heroes Earnings Assistance and Relief Act of 2008 (“HEART”). HEART requires plan sponsors to adopt an amendment by the end of the 2010.
Since the government likes to kill trees, your 401k administrator must also update your plan to comply with two more laws. The Emergency Economic Stabilization Act of 2008 (EESA) and the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA).
Your 401k administrator will be updating your plan for EESA in 2010. However WRERA is a bit more complicated. Some parts of WRERA have to be updated by 2009, while other parts have to be updated by 2011.
You should check with your 401k administrator to find out when your 401k is being amended and for what. If you did not amend your plans in time for all of the regulations, you will have to file late amendments and pay a fine. You should talk to a 401k administrator to find out what the process is for making late amendments and what the fines would be.
If you want to learn more about what amendments are required, please visit our contact page.
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