It’s Time to Restate Your Pre-approved 403(b) Plan!
- Lauren Mamaghani
- 6 days ago
- 2 min read
The Takeaway
Each employer that sponsors a 403(b) plan which uses a pre-approved plan document must ensure that document is restated to account for changes in law by December 31, 2026. Especially for those nonprofit and public sector organizations characteristically facing resource and staffing constraints, it’s crucial to start the restatement process now.
What is a Restated, Pre-approved 403(b) Plan?
A retirement plan is “pre-approved” if it was filed with, and approved by, the IRS before the employer adopted it. Many employers use pre-approved plans provided by their vendors. To ensure that pre-approved plans incorporate provisions complying with new laws and regulations, the IRS requires the plans to be periodically restated and resubmitted for approval. If the IRS decides a resubmitted plan meets current legal requirements, it issues an opinion letter that confirms the plan is compliant. The plan sponsor can then rely on that opinion letter until the next restatement is due.
Why Restatements Are Necessary
It is important that employers adopt restatements of their pre-approved plans on a timely basis. Failure to do so means the employer will no longer be able to rely on the IRS’s approval of the document. Since the restated plan documents will have new provisions to comply with changes in the rules, the plans that are not restated by the deadline will likely be out of compliance. Those plans will also no longer be considered pre-approved. Instead, they will be treated as individually designed, and the plan sponsor will be responsible for any interim amendments necessary to keep them up to date.
Next Steps for Plan Sponsors
Employers with pre-approved 403(b) plan documents from their vendors should contact their vendors to:
Confirm the vendor will provide a pre-approved restatement in advance of the deadline;
Familiarize themselves with the required and discretionary changes introduced into law since the document was last adopted;
Ensure they will operate in compliance with any required changes as of the applicable effective dates; and
Adopt the required restatements by the deadline.
When to Contact Boutwell Fay
Please feel free to contact any Boutwell Fay attorney with any questions about this process or how the application of recent changes in law will affect your plan document or operations. If you miss the restatement deadline, our attorneys are happy to help you correct the problem using the IRS’s Employee Plans Compliance Resolution System (“EPCRS”).
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