Employers with a pre-approved defined benefit pension plan must update their plan documents by March 31, 2025.
Individually designed plans not currently using a pre-approved document may be updated on a pre-approved document by the same deadline. Adopting a pre-approved document assures the plan sponsor that the document continues to be legally compliant.
The window to update pre-approved plans typically opens every six years. While updating the retirement plan is required for plans on a pre-approved document, this process presents an excellent opportunity for plan sponsors to talk with Warner about how their defined benefit pension plan document is working for them, to discuss trends in plan design and governance, and to review best practices for avoiding future compliance issues and fiduciary risks.
Warner’s Employee Benefits Practice Group maintains a pre-approved document for our clients.
Advantages of Warner’s Pre-Approved Document
Warner’s defined benefit pension plan document was created using an employer-focused drafting process and includes thousands of options already pre-approved by the IRS. In addition, we craft provisions providing maximum protections for plan sponsors and fiduciaries, based on careful attention to increased retirement plan litigation. This careful drafting process and flexible plan design is what distinguishes Warner’s document from others in the retirement plan marketplace.
Less costly plans often are automatically computer-generated or prepared by someone with limited retirement plan expertise – someone whose primary job is to protect the plan document provider or sell new plan features. These individuals generally don’t make design recommendations or provide advice in your best interests – only the employer’s lawyers can provide legal advice.
We gather information from each client and craft an updated plan that is specifically tailored to that client’s unique needs, while also satisfying applicable legal requirements.
You Can Apply for an IRS Determination Letter
A defined benefit pension plan rewritten using Warner’s pre-approved document generally will be eligible to apply to the IRS for an individual determination letter regarding the plan’s ongoing tax-qualified status. The ability to apply for and get an IRS favorable determination letter has become increasingly valuable as the IRS has significantly limited this opportunity for plan sponsors of individually designed plans. An individually designed plan that received a favorable determination letter years ago is required to be updated for changes to the plan and the law, but the sponsor will have no assurance from the IRS that the updated document is compliant.
Billing Options
Warner appreciates our clients’ need to understand and control costs, and we are open to completing this project on an alternative fee basis. If you are interested in exploring this opportunity, just let us know.
Fees Payable from Plan Assets
The IRS determination letter filing fee for an updated plan on Warner’s pre-approved plan document can be paid from plan assets.
Some, or possibly all, of our fees for preparing the plan document are likely plan-payable as well.
Next Steps
If your defined benefit pension plan already uses the Warner pre-approved plan document, we will contact you directly about your plan’s required update and IRS determination letter submission.
If you sponsor a defined benefit pension plan that does not use the Warner pre-approved plan document and need a legal review of your plan restatement or would like to discuss converting to Warner’s document, please contact a retirement plan member of Warner’s Employee Benefits Practice Group.
Warner is here to help! For more information about how Warner can help with your defined benefit pension plan’s legal needs, please see our brochure.
