Year-End Qualified Retirement Plan Compliance Checklist

Authored by Dannae L. Delano

Nov 11, 2015

Employer retirement plan sponsors must be aware of the year-end notice, filing, operational compliance, and amendment deadlines to ensure continued tax qualification and legal compliance for Year-End qualified retirement plans. Noncompliance will result in penalties and taxes and could, ultimately, affect the tax-qualified status of your plans. The following items must be considered prior to year-end to ensure qualified retirement plan compliance.


Plan sponsors must ensure the following required notices are provided to participants at least 30 days and no more than 90 days prior to the beginning of the plan year (on or before Dec. 1 for calendar year plans). These notices can be combined into a single notice if more than one of the following is required for a single plan.

  • Safe Harbor 401(k) Plan Notice: If the plan is a safe harbor 401(k) plan, all participants must receive a notice that explains what the safe harbor employer contributions consist of and other features of the plan due to its status as a safe harbor plan.
  • Qualified Default Investment Notice: Participant-directed defined contribution plans may utilize a default investment and reduce the plan sponsor’s fiduciary liability related to plan investments. These plans must give participants an annual notice regarding the default investment.
  • Automatic Enrollment 401(k) Plan Notice: If the plan automatically enrolls employees, it must distribute an annual notice to employees that describes how eligible employees are enrolled and what pay will be automatically contributed to the plan.


The following amendments, restatements, and filings need to be considered prior to year end:

  • Discretionary Plan Amendments: The general rule is that discretionary amendments to qualified retirement plans must be adopted by the end of the plan year in which they are implemented (Dec. 31, 2015 for 2015 changes to calendar year plans). In addition, discretionary design changes that will be implemented in 2016 that result in a reduction of benefits may need to be adopted in 2015 to avoid a prohibited cutback of accrued benefits.
  • Prior Year Required or Discretionary Plan Amendments: Amendments relating to prior plan years should be considered as part of any year-end plan review, including whether they were prepared and properly adopted and executed. If a plan sponsor discovers a failure to properly adopt a plan amendment, it should consider correcting the failure through the Internal Revenue Service (IRS) Employee Plans Compliance Resolution System (EPCRS). In many cases, correction through EPCRS results in reduced compliance fees. Monetary sanctions can be substantial if an amendment failure is discovered during a review of a determination letter request or an IRS plan audit.
  • Restatement of Prototype and Volume Submitter Document Plans: Plan Sponsors that utilize provider prototype or volume submitter plan documents should be aware that the window for the new restatement cycle is open. When documents are restated on these type of documents by providers, it is vital that the intended terms of the Plan are selected. Plan sponsors should consider review by counsel to ensure the Plan contains the intended provisions/language. These plans must be restated on or before April 30, 2016.
  • Filing and Restatement of Cycle E Qualified Retirement Plans: Individually designed retirement plans must be restated and have IRS determination letters renewed once every 5 years by filing the plan with the IRS. Cycle E Plans (Plans with sponsors that have a “5” or “0” as the last digit of their Employer Identification Number (EIN) and governmental plans that elected to file in Cycle E) must be restated and have an application for determination letter renewal on file with the IRS on or before 31, 2016 to remain tax-qualified. Cycle E Plans must restate their plans and submit a determination letter application to the IRS for approval on or before Jan. 31, 2016. Restatements and determination letter applications take some time to prepare and execute. Consequently, we recommend beginning this process as soon as possible to meet the Jan. 31, 2016 deadline.
  • End of IRS Determination Letter Program: Earlier this year, the IRS announced the end of the determination letter program for individually designed plans effective 1, 2017. To continue receiving a determination letter, individually designed plan sponsors may wish to adopt a prototype or volume submitter plan. Cycle E filers can accomplish this by signing Form 8905 (Certification of Intent To Adopt a Pre-approved Plan) prior to Jan. 31, 2016.


The Department of Labor is requesting evidence of fiduciary training on audit. In addition, there are extensive IRS corrections programs that may be utilized if a Plan Sponsor performs a self-audit and discovers errors in operations and plan document failures before an audit is requested by the IRS. Plan sponsors must have evidence of fiduciary training and consider self-auditing retirement plans to determine whether corrections are necessary. With the projected end of the IRS determination letter program, plan sponsors should take more consideration of auditing for failures and correcting under EPCRS on an annual basis. In addition to the plan document errors discussed above, operational errors may also be corrected through EPCRS. Many operational errors may be self-corrected without contacting the IRS and without paying a fine.

If you have any questions about year end qualified retirement plan compliance or any other employee benefits matter, please do not hesitate to contact Dannae Delano.

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