Category Archives: Restatements

PPA Restatements: Information is Power and Monopoly is Powerful

I never thought posting a simple chart to make gathering information about PPA restatements pricing easy would be so controversial. (You can get a copy of the chart at

A few weeks ago, I blogged about the video of Steve Jobs speech about Apple’s battle with IBM that led to the 1984 Super Bowl commercial. The video is powerful because it was true – when the video was made, IBM controlled a large portion of the PC market and liked to crush its competitors.

With the IRS deadline for firms to make a decision about which plan document provider they will signing up with as a word-for-word sponsor of that company’s PPA DC Restatements fast approaching, I went back and took a look at the breakdown of the plan document industry six years ago using the EGTRRA DC Restatements. The information was eye-opening. As Steve Jobs said, George Orwell is alive and they do want it all.

Percentage of Market Share by EGTRRA Restatements Filings:

Corbel/Relius – 59.31%
McKay-Hochman – 17.01%
Datair – 8.29%
ASCi – 3.01%
Accudraft – 2.00%
FT William – 1.52%

Note: The percentages were calculated using the total number of EGTRRA DC filings (11,683) contained on the IRS DC EGTRRA Master List divided by the number of filings for each major document provider. The number of filings for McKay-Hochman and Brucker & Morra were combined as McKay-Hochman’s website says their volume submitter plans are created by the law firm of Brucker & Morra. Without the Brucker & Morra filings, McKay-Hochman’s percentage drops to 15.67%.

Comparing PPA Restatement Fees the Easy Way

easy button
We’ve created an easy-to-use chart for comparing what all of the major plan document providers are charging for PPA restatements and posted it on our website.

On the chart, we’ve included our pricing, and questions we think every firm should ask before making a 6-year commitment to a specific plan document provider by deciding to sign up with the IRS as one of that plan document provider’s word-for-word adopters of their PPA defined contribution restatements.

The chart includes spaces to fill-in pricing and other details from all of the major plan document providers – Accudraft, ASCi, Corbel/Relius, FT William, Erisafile, and McKay-Hochman. With ASPPA Annual starting in a couple of days, filling in the chart should be easy.

IRS Extends Plan Document Deadline to Jan. 31, 2012

more time

The IRS released Rev. Proc. 2011-49 today (Oct. 5, 2011). Rev. Proc. 2011-49 is the update to Rev. Proc. 2005-16, and officially supersedes Rev. Proc. 2005-16.

Rev. Proc. 2005-16 contained the specifics on applying for EGTRRA opinion/advisory letters during the last 6-year cycle. Rev. Proc. 2011-49 contains the specifics on applying for PPA opinion/advisory letters for the next 6-year defined contribution prototype and volume submitter cycle.

It states:

The 12-month applicable on-cycle submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end on January 31, 2012. Section 18.02(1) of Rev. Proc. 2007-44, 2007-2 C.B. 54, provides that the 9-month applicable on-cycle submission period for sponsors and practitioners maintaining defined contribution mass submitter plans will end on October 31, 2011. Section 23 of this revenue procedure extends the submission deadline to submit applications for opinion and advisory letters for sponsors and practitioners maintaining defined contribution mass submitter plans from October 31, 2011 to January 31, 2012.

This is good news for TPA firms because they now have another 3 months to decide which document provider they want to use for their defined contribution plan documents, including 401(k) plan documents, for the next 6-year plan document cycle.

This is also good news for plan document providers who are waiting for the IRS to issue the updated Defined Contribution List of Required Modifications (DC LRMs) needed to actually write their plan documents.

Was George Orwell Right About Plan Documents

It’s that time again. Time to decide whose defined contribution plan documents you will be using during the next six year cycle. On the day my competitors are raising their prices and worrying about losing revenue because a small group of ERPAs want to start a small CPE co-op, we have a different vision of what the future of plan documents will be. Before deciding whose plan documents you will be using in 2016, take a look at what Steve Jobs said in 1983, and think about what kind of plan document future you want.

We believe the choice is clear. Join us.

Erisafile logo

The Six Year Submission Cycle Begins Again

Hallelujah! Just in time for Christmas the IRS has released Notice 2010-90. It contains the 2010 Cumulative List, which is to be used to restate individually designed Cycle A plans and submit them to the IRS for a determination letter between Feb. 1, 2011 and Jan. 31, 2012.

The reason I am so excited about Notice 2010-90 is that it states the 2010 Cumulative List is also to be used by plan sponsors and practitioners for submitting opinion/advisory letter applications for defined contribution pre-approved prototype and volume submitter plan documents for the second submission under the remedial amendment cycle under Rev. Proc. 2007-44. For anyone who writes prototype and volume submitter defined contribution plan documents, which I do, Notice 2010-90 contains crucial information needed to create the next generation of plan documents. With Notice 2010-90, the next generation of defined contribution plans can finally move from speculation to creation.

For those of you saying “Whoa, wait a minute, the restatement cycle for pre-approved prototype and volume submitter defined contribution plans just ended on April 30, 2010″, you are correct – it did just end earlier this year. This Cumulative List is the recipe for creating plan documents needed to restate for the next restatement cycle that will end around April 30, 2016. Rev. Proc. 2007-44 explains it this way –

Feb. 1, 2011 to Jan. 31, 2012 – plan document providers mail their prototype and volume submitter plan to the IRS

Feb. 1, 2012 to approx. Jan. 31, 2014 – IRS reviews those plan documents and approves them

approx. Feb. 1, 2014 to approx. Jan. 31, 2017 – plan sponsors restate onto the new defined contribution plan documents

The current generation of plan documents are commonly known as EGTRRA documents. No indication from the IRS in Notice 2010-90 about what name the next generation of plan documents will be commonly known by. My best guess at this point is that the documents will be known as the PPA plan documents. Now I just need the updated version of Notice 2005-16 for 2010 and the updated 2010 DC LRMs, and a lot of caffeine.

Restating a Defined Contribution Plan Prior to Terminating

Now that the annual -6 Revenue Procedure has been released – Rev. Proc. 2010-6 – I’m starting to receive a lot of questions about Section 12.07 of that Rev. Proc. Does it really say that a terminating plan does not need to be restated???

A quick check of Section 12.07 shows that it says exactly that. It states:

“Restatement not required for terminating plan

.07 A terminating plan generally does not have to be restated. However, see .06 above.”

I’ve bolded the “However” in Section 12.07 because it is one of those classic IRS caveats. The “However” means that Section 12.07 is not giving a free pass for not updating a plan document prior to termination. Section 12.06 of Rev. Proc. 2010-6 is the requirement that a terminating plan must be amended to comply with any changes in the law from the time it was last restated up through the termination date. It states:

“Termination prior to time for amending for change in law

.06 A plan that terminates after the effective date of a change in law, but prior to the date that amendments are otherwise required, must be amended to comply with the applicable provisions of law from the date on which such provisions become effective with respect to the plan. Because such a terminated plan would no longer be in existence by the required amendment date and therefore could not be amended on that date, such plan must be amended in connection with the plan termination to comply with those provisions of law that become effective with respect to the plan on or before the date of plan termination. (Such amendments include any amendments made after the date of plan termination that were required in order to obtain a favorable determination letter.) In addition, annuity contracts distributed from such terminated plans also must meet all the applicable provisions of any change in law. See also section 8 of Rev. Proc. 2007-44.”

On a historical note, Section 12.07 of Rev. Proc. 2010-6 is not new. Section 12.07 of last year’s -6 Revenue Procedure – Rev. Proc. 2009-6 – said the same thing. As did Section 12.07 of Rev. Proc. 2008-6.

I had to go back to Rev. Proc. 2007-6 to find even a slight change in the language of Section 12.07. It states:

“Termination prior to end of the on-cycle submission period

.07 A plan that terminates prior to the end of the on-cycle submission period does not have to be restated. However, see .06 above.”

Section 12.07 was added in Rev. Proc. 2007-6, so the difference in language between Rev. Proc. 2007-6 and Rev. Proc. 2008-6 may be that the IRS decided a slight change in the language may help clarify the meaning of Section 12.07.

The -6 Revenue Procedure for 2006 – Rev. Proc. 2006-6 – does not contain Section 12.07. In Rev. Proc. 2006-6, Section 12 ends with Section 12.06.