Another year has come and gone, and at the end of 2021, it’s a good idea to take stock of things – and understand what your retirement planning options are and what you need to do in the coming year.
For many employers and plan sponsors, the end of the year brings changes and updates. It’s a great time for employers to review any updates or deadlines in regards to plan amendments, talking with providers and financial experts to make sure any necessary plan updates are handled.
Many plans need to have these changes made by Dec. 31 so it’s a good time to brush up on your plan.
There are some amendments, spelled out by the Internal Revenue Service, that have deadlines approaching. They include:
Hardship Distribution Amendments
Several years ago, Congress made changes to the hardship distribution rules for some 401(k) and 403(b) plans. These changes took effect Jan. 1, 2020. There were several changes made, and plans providing these hardship distributions need to be amended by Dec. 31, 2021.
Discretionary Amendments
If employers want to make changes to the terms of their retirement plans (and this are changes NOT required by law, thus calling them discretionary), there needs to be an amendment made reflecting the discretionary changes by the last day of the plan year.
In response to the COVID-19 pandemic, for example, some employers in 2020 suspended or cut contributions to retirement plans. If those contributions were reinstated in 2021, there needs to be an amendment in place by Dec. 31, 2021.
As with anything, timing is of the essence, so working to get these amendments in place now is critical.
Do you still have questions about retirement planning options?
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