Page 156 - FebDefComp

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REQUIRED OR
PROVISION DESCRIPTION EFFECTIVE DATE OPTIONAL
Plan adopted by filing due Extends the plan adoption deadline from the last day of the employer’s Applies to plans adopted This rule change extends
date for year may be taxable year to the employer’s tax filing due date (including for tax years beginning the plan adoption
treated as in effect as of extensions) for that year. after 12/31/2019 deadline.
close of year

Delayed Effective Dates. The below listed provisions have effective dates that are either:
 later than plan year (or tax year) beginning after December 31, 2019; or
 the effective date is yet to be determined.
REQUIRED OR
PROVISION DESCRIPTION EFFECTIVE DATE OPTIONAL
Multiple Employer Plans / Allows unrelated employers to participate in a multiple employer plan, Plan years beginning This is a new plan design
Pooled Employer Plans called a “pooled employer plan,” that would be treated as a single plan after 12/31/2020 option that removes the
for ERISA purposes. Treatment as a pooled employer plan is “nexus” requirement
conditioned on the plan using a “pooled plan provider” (PPP). The PPP that previously applied to
is responsible for performing all administrative duties necessary to multiple employer plans.
ensure that the plan complies with ERISA and the Code.

A PPP must be a named fiduciary, the plan administrator, and is subject
to registration, audit, examination, and investigation by Treasury and
the Department of Labor.

Except with respect to the administrative duties of the PPP, each
employer in a pooled employer plan is treated as the plan sponsor with
respect to the portion of the plan attributable to the employees of such
employer.
Qualified cash or deferred Except in the case of collectively bargained plans, employers Plan years beginning Required
arrangements must allow maintaining a 401(k) plan are required to have a dual eligibility after 12/31/2020
long‐term, part‐time requirement under which an employee must complete either: (service during 12‐
employees to participate  One year of service (with the 1,000 hour rule), or month periods
 Three consecutive years of service where the employee completes at beginning before
least 500 hours of service each year. 1/1/2021 shall not be
taken into account)
In the case of employees who are eligible solely by reason of the three
consecutive years / 500 hours rule:
 An employer shall not be required to make nonelective or matching
contributions on behalf of such employees even if such contributions
are made on behalf of other employees eligible to participate in the
arrangement.
 The employer may elect to exclude such employees from testing under
the nondiscrimination and coverage rules, and from the application of
the top‐heavy rules.
 Each 12‐month period for which the employee has at least 500 hours
of service shall be treated as a year of service for vesting purposes and
shall not be treated as a 1‐year break in service.
Combined annual report A group of similar plans (individual account plans or defined Shall be implemented Optional. Upon
for group of plans contribution plans) shall be permitted to file a single consolidated Form not later than 1/1/2022, implementation, the
5500 if all plans in the group: and shall apply to combined filing option
 Have the same trustee, named fiduciary (or named fiduciaries), and returns and reports for will offer employers an
administrator. plan years beginning opportunity to reduce
 Use the same plan year. after 12/31/2021 administrative costs.
 Provide the same investments or investment options to participants
and beneficiaries.

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