Request 2019 Retirement Plan Changes Now

Is your cooperative planning to make a design change to its NRECA-sponsored Retirement Security (RS) Plan or 401(k) Pension Plan in the near future? Plan changes are a necessary part of providing competitive benefits to your employees. If you’re thinking of amending your plan, either now or on January 1 (the most common date for plan amendments), contact your NRECA field representative early to start discussing your specific needs.

Take these steps when you are considering a retirement plan change.

Contact your NRECA field representative to begin the process and discuss the timeframe and analyze the testing impact, if applicable. 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
January 1 is the most popular date for benefit plan amendments. Here is an example of the timeline to execute a simple plan change for January 1, 2019. More complex plan changes, including the new RS Plan lump sum and quasi-retirement opt-out features and other changes involving RS Plan proposals, require additional time.

October
Step 1: 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 2: NRECA produces and delivers a new plan adoption agreement or addendum, a sample board resolution, and additional required notices, if applicable.

Step 3: The 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, which will need to be sent to participants 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 4: The co-op returns its signed adoption agreement or addendum and board resolution to NRECA by November 30, 2018. 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 2018, contact your field representative by October 8, 2018. 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, 2018. 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 2019 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, we encourage you to reach out to your NRECA field representative. Watch for an article in the October Benefits Bulletin for an in-depth look at the steps to making a change to your RS or 401(k) Plans.