Steps to Make a Retirement Plan Change for 2023

If you’re thinking of amending your Retirement Security (RS) Plan or 401(k) Pension Plan early in 2023, contact your NRECA field representative soon to start discussing the process and timing.

For simple changes, contact NRECA at least 60 days before the desired effective date. Adding the Roth option, loan provisions, or in-service or hardship distributions to the 401(k) Plan are examples of simple changes.

For more complex changes, contact NRECA at least 120 days before your desired effective date. Downgrading plan provisions, adding a new hire plan or expanding excluded classes are examples of complex plan changes that may require an RS Plan proposal.

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 complex changes (such as adding the cash balance feature to your co-op’s RS Plan) require preliminary proposals, customized benefit illustrations, or advance participant notices before the effective date. Once the change is clearly defined, NRECA reviews it and provides guidance on the impact to your plan’s nondiscrimination testing.

Here is a sample timeline for a simple plan change effective January 1, 2023:

• By mid-October, contact your field representative to evaluate objectives. NRECA will prepare preliminary proposals and explain the testing impact when required.
• In November, NRECA will deliver a new plan adoption agreement or addendum, a sample board resolution, and additional required notices, if applicable. Your co-op must execute and return the signed adoption agreement or addendum and board resolution to NRECA by November 30, 2022.
• In December, NRECA conducts its 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 2022, contact your field representative by October 1, 2022. 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, 2022. 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 2023 depending on the circumstances within the SERP. If you have questions about SERPS, contact the benefits compliance team at 866.673.2299, option 7, or pension.compliance@nreca.coop.

For other questions related to plan changes or adding the RS Plan’s cash balance feature, contact your field representative.