Request 2018 Retirement Plan Changes Now

Now that the NRECA-sponsored retirement plans have been restated, your cooperative may want to amend its benefit plans, either later this year or at the most common date for amendments, which is January 1. Common changes include permitting Roth contributions to your 401(k) Pension Plan or revising benefit levels in the Retirement Security (RS) Plan.

If you are considering an amendment, first return your July 2017 restatement documents. Your co-op must have adopted the restated plans, effective July 1, 2017, before a plan change can be processed. Visit the restatement page of the Employee Benefits website for guidelines. Restatement documents are due by October 31, 2017, regardless of whether you plan to make any changes.

Next, contact your NRECA field representative to begin the change process and discuss the timeframe and impact. All changes require a board resolution, and your co-op 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.

Sample timeline
Since the first of the year is a popular date for benefit plan amendments, here is an example of the timeline to execute a simple plan change for January 1, 2018. More complex plan changes or those involving RS Plan proposals require additional time.

October
Step 1: Return your restatement adoption agreement and board resolution for the July 1, 2017 restatement (if you haven’t already).

Step 2: The co-op contacts its field representative to evaluate objectives. Preliminary proposals, if necessary, are produced for the co-op to consider. Once the plan change is defined, NRECA provides guidance on the impact.

November
Step 3: NRECA produces and delivers a new plan adoption agreement or addendum, a sample board resolution, and additional required notices, if applicable.

Step 4: The co-op executes the adoption agreement or addendum and the board resolution at least 30 days before the effective date. If the change means that participant benefits are reduced, ERISA 204(h) notices may be required up to 45 days before the change. In those cases, the co-op executes the adoption agreement or addendum and the board resolution at least 60 days before the effective date of the change.

December
Step 5: The co-op returns its signed adoption agreement or addendum and board resolution to NRECA by December 1, 2017. NRECA conducts final legal and compliance review, approves the documents and makes any administrative accommodations necessary to implement the change.

If you are considering a Special Early Retirement Program (SERP) for 2017, contact your field representative by October 13, 2017. 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, 2017. 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 2018 depending on the circumstances within the SERP.

Call us with questions
Plan changes can be a necessary part of providing competitive benefits to your employees. NRECA is here to support you. To serve you best and allow time for proper review of your plan changes, contact your NRECA field representative early to start discussing your specific needs.

Look for an upcoming Benefits Bulletin for an in-depth look at the steps to making a change to your RS or 401(k) Plan.