Reminder: Request 2020 Retirement Plan Changes Now

Plan changes are a necessary part of benefit plan administration. If you’re thinking of amending your NRECA-sponsored Retirement Security (RS) Plan or 401(k) Pension Plan either now or on January 1 (the most common date for plan amendments), contact your NRECA field representative now to start discussing your specific needs. Here are the steps to take.

To begin the process, talk to your NRECA field representative. All changes require a board resolution, and your cooperative also must review and approve a new adoption agreement (or an addendum) reflecting the change. Some changes require customized benefit illustrations and advance participant notices before the effective date. NRECA may also prepare a preliminary proposal for you to consider. Once the change is clearly defined, NRECA reviews it and provides guidance on the impact, including the effect on your plan’s nondiscrimination testing.

Here is an example of the timeline to implement a simple plan change, e.g., adding Roth 401(k) Plan contributions, for January 1, 2020. More complex plan changes such as adding the RS Plan lump sum and quasi-retirement opt-out features, both of which involve RS Plan proposals, require additional time.

By mid-October, contact your field representative to evaluate objectives. NRECA will produce preliminary proposals, if necessary, for you to consider. Once the plan change is defined, NRECA provides guidance on the impact.

In November:

• NRECA produces and delivers a new plan adoption agreement or addendum, a sample board resolution, and additional required notices, if applicable.
• Your co-op executes the adoption agreement or addendum and the board resolution at least 30 days before the effective date of the change. If the change means that participant benefits are reduced, ERISA 204(h) notices may be required, and must be sent to participants up to 45 days before the change. In those cases, co-ops execute the adoption agreement or addendum and the board resolution at least 60 days before the effective date of the change.
• Return the signed adoption agreement or addendum and board resolution to NRECA by November 29, 2019.

In December, NRECA conducts final legal and compliance review, approves the documents and makes any administrative accommodations necessary to implement the change.

SERPs
If you are considering a special early retirement program (SERP) for 2019, contact your field representative by October 1, 2019. Because SERPs cannot cross over calendar years, proposals, board action, employee communications and the start of the window period must all occur by November 15, 2019. Fully adopting a SERP is typically a three-month process. SERPs started later in October may need to be deferred to the first quarter of 2020 depending on the circumstances within the SERP. We encourage you to reach out to your NRECA field representative or benefits compliance if you have questions about making a change to your retirement plans.