Get Ready: New IRA Model Documents Are Coming
By Lisa Walker, CISP, CHSP
The IRS is expected to release new IRA model documents soon. When that happens, all IRA trustees, custodians, and issuers will most likely be required to amend to the new IRS model document or to use the new IRS language in their prototype documents. And going forward, all newly established IRAs will need to use the new document or language.
Review Your Current Agreement
Before that happens, consider reviewing your existing IRA plan agreement—whether it’s a model document or a prototype—to ensure that it still makes sense for your organization. Is it still in line with your procedures? Should it be modified to better fit your business? If you’ve been contemplating making any IRA document changes, now may be the ideal time to do so.
Pay Close Attention to the Language
IRS model forms satisfy the basic statutory requirements for IRAs and contain specific language based on the requirements for each type of IRA. If your organization uses the model form or a document based on the model form, such as the Ascensus Simplifier®, pay close attention to the language in the last article of the form (Article VIII or Article IX), which can be customized without conflicting with Internal Revenue Code requirements. It’s in this last article that your organization or document provider can make changes and address items not covered in the other articles of the form: Articles I–VII for a Traditional IRA and Articles I–VIII for a Roth IRA. These articles generally cannot be changed.
Don’t Forget About Your Disclosure Statement
When reviewing your plan agreement, include a review of your disclosure statement, which must be given to IRA owners along with a plan agreement when they open an IRA. It’s the nontechnical counterpart to the IRA plan agreement; it should explain the IRA rules in plain language and must include a financial disclosure. Your disclosure statement will likely need to be amended when the new model document is released.
While the IRS does not provide a model disclosure statement or disclosure statement language, it does allow you to use IRS Publications 590-A and 590-B to satisfy the disclosure statement requirement. Otherwise, your organization must write its own disclosure statement or obtain one from a forms vendor.
Trust the Experts
A forms vendor or document provider like Ascensus can offer a plan document and disclosure statement, either separately or in a combined format. Ascensus’ documents are drafted by expert, in-house ERISA staff with decades of combined experience specializing in IRA documents. They continually monitor federal government requirements and carefully draft and revise documents as needed to meet these requirements. Whether you choose to use a plan agreement kit like the Ascensus Simplifier or to have Ascensus customize your documents, you’ll save time and expense by having the work done for you.
With new IRS model documents on their way, you’ll likely have to re-paper your IRA clients. As you budget and plan for these anticipated changes, trust the experts at Ascensus to help. We’ll be happy to provide a complimentary document review and discuss document options for your organization.
Schedule a call with your Ascensus sales representative or contact us at 800-346-3860.
Ascensus Simplifier® is a registered trademark of Ascensus, LLC.
