In an article published in BenefitsPro on July 27, Hirschler counsel Marie Carter offers considerations for employers and plan sponsors looking to suspend or reduce retirement plan contributions in the wake of COVID-19. As Carter points out, these considerations will vary based on plan type, the timing of required notices to employees, and other factors.
Carter reminds employers that decisions to reduce or suspend contributions should be well documented. “A plan amendment needs to be approved by the persons identified in the plan document as the persons with authority to do so,” Carter said. “Usually, this will be the Board of Directors or a committee appointed by the Board. The approval should be in the form of resolutions, with recitals that explain the purpose of the amendment. Signed copies of plan amendments should be filed in the minute book, and all participant notices should be retained with plan records for at least 6 years, and preferably until 3 years after the plan is terminated.”
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Myrna H. Rooks