April 20, 2015
The current cycle of plan restatements is being referred to as the “PPA restatement” after the Pension Protection Act (PPA) of 2006. Plan sponsors of pre-approved plans need to complete the restatement process by April 30, 2016.
In addition to fulfilling legal requirements, plan sponsors may view the plan restatement as an opportunity to decide if any additional changes should be made to their plan.
During a restatement, a plan’s documents are updated and resubmitted for review and approval. Plan sponsors use the restatement period to incorporate any amendments they have adopted since the last time the document was restated.
PPA restatements incorporate updates regarding laws and regulations implemented since 2006, including features such as automatic enrollment and in-plan Roth rollovers. Failure to restate the plan before the deadline can result in disqualification of the plan and/or significant penalties.
The timing of restatements is typically dependent on the type of plan and plan document. For example, pre-approved plans generally must be restated every six years while individually designed plans must generally be restated every five years.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors, Inc. and sold through unaffiliated intermediaries.
This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.