Retirement Plan Year-End Deadlines Soon Occurring
The last three months of the year are busy months for retirement plan administrators of calendar-year retirement plans and for employers sponsoring savings incentive match plan for employees of small employers (SIMPLE) IRA plans. Some of the approaching year-end deadlines involve getting Department of Labor (DOL) or Internal Revenue Service (IRS) required notices
out to participants, taking corrective actions, and filing IRS or DOL forms.
Although each employer ultimately must meet these important deadlines, financial organizations often play a role by assisting with documentation and fielding deadline questions. A review of the common late-year deadlines for calendar-year plans may help efforts to meet the appropriate deadlines.
The following retirement plan deadlines apply for calendar-year plans. Keep in mind that there may be other nonperiodic deadlines that are not included in this list.
Key Deadlines for Calendar-Year Retirement Plans
Oct. 1 - Establish Safe Harbor 401(k) Plan for 2017. Unless the business is a new business, this is the last day that the employer can establish the plan to allow contributions to be made for the remainder of 2017.
Oct. 1 - Establish SIMPLE 401(k) or SIMPLE IRA plan for 2017. Unless the business is a new business, this is the last day that the employer can establish the plan to allow contributions to be made for the remainder of 2017.
Oct. 2 - Safe Harbor 401(k) Notice. This is the earliest date that the employer can provide the safe harbor 401(k) notice containing information on employer contributions, employee deferrals, and certain other information to each employee. Employees must receive this notice no earlier than 90 days and no later than 30 days before the beginning of each plan year.
Oct. 2 - Automatic Enrollment Notices (EACA, QACA). This is the earliest date an employer can provide employees with the annual automatic enrollment notices for eligible automatic contribution arrangements (EACAs) and qualified automatic contribution arrangements (QACAs). Eligible employees must receive the EACA or QACA notice within a reasonable time before the first day of the plan year (generally 30-90 days).
Oct. 15 - Corrective Plan Amendment. This is the last day to retroactively amend a plan to correct a testing failure for general nondiscrimination under IRC Sec. 401(a)(4), minimum coverage under IRC Sec. 410(b), or certain compensation requirements.
Oct. 31 - SIMPLE IRA Plan Summary Description. This is the latest date that financial organizations may provide summary description information to employers sponsoring SIMPLE IRA plans so that employers can meet their November 1 deadline to employees.
Nov. 1 - SIMPLE IRA Plan Summary Description. This is the latest date that employers sponsoring SIMPLE IRA plans may provide summary descriptions to employees.
Nov. 1 - SIMPLE IRA and SIMPLE 401(k) Deferral Notices. Employers must provide employees notification of the employer contribution for the coming year and a deferral notice explaining their salary reduction rights. This must be done before the employee deferral election period, which is the 60-day period immediately before the beginning of the new plan year (i.e., November 2 to December 31 of the preceding year).
Dec. 2 - Safe Harbor 401(k) Notice. This is the last day for an employer to provide safe harbor 401(k) notices. Employers generally must provide the notice to each employee no earlier than 90 days and no later than 30 days before the beginning of each plan year.
Dec. 2 - Qualified Default Investment Alternative (QDIA) Notices. Employers generally must provide this notice at least 30 days before the first day of the plan year. Because the federal rules do not specify a definitive time frame for this QDIA notice, the 30-90 day period before the new plan year generally is considered reasonable.
Dec. 2 - Automatic Enrollment Notices (EACA, QACA). This is the last day for an employer to provide EACA and QACA notices. Employers generally must provide these notices to employees between 30 and 90 days before the beginning of each plan year.
Dec. 2 - Automatic Contribution Arrangement Notices. Employers generally must provide this notice at least 30 days before the first day of the plan year. This deadline applies to ACAs that are not designed as EACAs or QACAs. Because the federal rules do not specify a definitive time frame for this ACA notice, the 30-90 day period before the new plan year generally is considered reasonable. (See the October 2 automatic enrollment EACAs and QACAs notices earlier.)
Dec. 31 - Required Minimum Distributions. This is the deadline to make required minimum distributions to plan participants for every year after the first required distribution year. For the first distribution year when participants turn age 70½, they have until April 1 of the following year (or April 1 of the year following the year of retirement, plan permitting) to receive their required minimum distributions.
Dec. 31 - Actual Deferral Percentage/Actual Contribution Percentage (ADP/ACP) Failure Corrections. This is the deadline to distribute 2016 excess ADP and ACP contributions, including income, without jeopardizing the plan’s tax-qualified status (the employer is subject to a 10-percent penalty tax). This also is the deadline to make corrections with qualified nonelective contributions (QNECs) or qualified matching contributions (QMACs) to avoid the 10-percent penalty tax. (Only plans using current-year testing can use this QNEC/QMAC funding method.)
Dec. 31 - Safe Harbor 401(k) Provision Amendment. This is the deadline for an employer to amend an existing plan to include or terminate a safe harbor 401(k) provision for a 2018 calendar-year plan.
Dec. 31 - Self-Employed and Self-Employed Partner Elections. Compensation for self-employed individuals is deemed currently available on the last day of the employer’s taxable year ending with or within the applicable plan year. Therefore, self-employed individuals who have 2017 calendar-year plans should make their deferral elections by this date.
Dec. 31 - Discretionary Plan Amendments. An existing calendar-year plan must be amended for any employer initiated changes to the plan that are applicable for 2017.
Deadlines for Form 5500 Filing Extensions
Employers must file their Forms 5500 with the DOL by the last day of the seventh month following the close of the plan year. This includes
- Form 5500, Annual Return/Report of Employee Benefit Plan, and appropriate schedules,
- Form 5500-SF, Short Form Annual Return/Report of Small Benefit Plan, and
- Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan.
For calendar-year plans, this deadline is July 31 of the year following the plan year. This also is the deadline for filing Form 8955-SSA, Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits, for calendar-year plans. This form must be filed if the plan has any participants who separated from service and elected to defer distributions of their retirement plan assets until a later time.
An employer may receive an automatic extension if certain conditions are met or may apply for a 2½ month extension by filing Form 5558, Application for Extension of Time To File Certain Employee Plan Returns. October 15, therefore, is the extended deadline for Forms 5500 and 8955-SSA, if applicable.
The summary annual report (SAR) will also be affected by a Form 5500 extension. The employer must distribute the SAR annually to each plan participant and beneficiary receiving benefits by the later of nine months after the close of the plan year or two months after the Form 5500 is due (in the case of an IRS-granted extension).
An employer must provide a statement of benefits to participants at least quarterly for plans that allow participants to direct their investments. Plans that are not participant-directed must provide benefit statements annually.