Every six years, the IRS requires us to update your pre-approved plan documents to incorporate any new regulatory changes that occurred since the documents were previously written.
The latest IRS deadline for Cycle 3 restatement was July 31, 2022. If you missed the deadline, you (or your plan trustee) must still review and sign these documents as soon as possible.
Does Cycle 3 affect my plan?
Your plan documents will be separated into two (an adoption agreement and a basic plan document) to make it easier for you to review.
Rest assured, your plan’s design (automatic enrollment amounts, employer contribution types and amounts, definition of compensation, vesting schedules, etc.) will not change with these requirements.
How can I sign the Cycle 3 documents?
You can learn how to review and sign Cycle 3 plan documents here.
If the trustee on your plan has changed, you can find more information on how to update this role here.
Cycle 3 FAQs
Here are answers to the most common questions about the Cycle 3 restatement process:
What changes are being made to the plan document?
As stated previously, your plan design will not change. We’ve simply added IRS requirements that occurred prior to February 1, 2017, which include the following changes:
Rules recognizing same-sex marriages
The trust document is no longer part of the pre-approved document (it is now included as a part of the service agreement)
Safe Harbor plan changes are allowed in the middle of the year in certain circumstances
Additionally, the new document will fully vest funds if a participant dies or becomes disabled while employed. Any legislative and regulatory changes, such as CARES and SECURE Acts, that came after February 1, 2017, will not be included in your plan documents. These changes will be made separately through plan amendments that will be signed by Guideline on your behalf.
What deadlines do I need to be aware of?
The original deadline for Cycle 3 was on July 31, 2022.
If you have not yet signed, you can still do so until December 31, 2025. However, you should complete the plan revision process as soon as possible. Otherwise, your plan may be at risk of the following:
The qualified status of your 401(k) plan may be in jeopardy
Your plan may no longer be entitled to tax-favored treatment
We will not be able to self-correct certain plan errors (like compliance limits)
Plan document language is no longer protected against an audit
Please note, the plan trustee must sign all applicable documents. To update the trustee role on your plan, see here.
Who does this impact?
The Cycle 3 restatement is an IRS requirement for all 401(k) plans in order to remain compliant and continue maintaining a pre-approved plan document. At Guideline, this restatement process affects all 401(k) plans that signed plan documents on or before early January 2022.
The plan trustee must review and sign the updated plan documents. No action is required on plan participants’ part to accept the changes.
What if I would like to make additional plan design changes?
In order to meet the IRS deadline, we ask that the trustee sign and approve the Cycle 3 restatement documents before implementing any other plan design changes. Once the documents are fully executed, the authorized plan administrator can request plan design changes, following the standard plan change process.
Will my employees receive notification about these changes?
Once the trustee has signed the new documents, a new Summary Plan Description (SPD) will be generated. When this is ready, your plan participants will receive an email letting them know their plan was restated and a new SPD is available for review. If they want to learn more, they can then log in to their Guideline dashboard to view the description and learn more about the plan.
I am the trustee for multiple plans, do I sign once or for each plan?
If you are the trustee of multiple plans, you will need to complete the restatement task and sign the new plan documents for each plan individually. Please log in to each account you administer to complete the Cycle 3 restatement for your plans.