Jump-start your year-end to-do list: 401(k) deadlines

The end of the year means upcoming due dates for many calendar-year qualified plans.

It can be surprisingly complicated to stay on top of all the dates and deadlines you need to monitor for your 401(k) plan. Prepare for year end with these key deadlines:

Not a calendar-year plan? Review the fiduciary calendar for your important dates and deadlines.

Actual Deferral Percentage (ADP)/Actual Contribution Percentage (ACP) Corrections
Due: December 1

The deadline for corrective distributions of ADP and ACP testing failures must generally be processed within 2.5 months after the plan year in order to avoid a 10% excise tax.

A plan may take corrective action beyond that deadline and still maintain the qualified status of the plan if it is within 12 months following the plan year. Still, the Internal Revenue Service (IRS) imposes a 10% excise tax on the employer. For a calendar-year plan, this means that December 31 is the last day to process corrective distributions for the prior year. If the correction is not made within that 12-month period, then the plan may correct through the Employee Plans Compliance Resolution System (EPCRS)—the IRS correction program.

For calendar year plans, submit Return of Excess (ROE) requests to Fidelity by December 1 to ensure processing within the 12-month deadline.

Summary Annual Report (SAR)
Extended Deadline – Due: December 15

Did your calendar-year plan extend its Form 5500 filing deadline to October 15? If so, then December 15 is the extended deadline for distributing the SAR to participants. The SAR is available via PSW® for plan sponsors who use the Form 5500 service.

Required Minimum Distributions (RMDs)
Due: December 31

There are two important deadlines when it comes to RMDs: April 1 and December 31. The April 1 deadline only applies to the RMD for the first year. All subsequent RMDs must be made by December 31.

Notices
Due: Varies

Annual required notices will soon be due for defined contribution plans with a calendar-year plan. Generally,* plans that leverage a safe harbor formula for nondiscrimination testing (ADP/ACP testing), incorporate an automatic enrollment feature, and/or use a qualified default investment alternative (QDIA) as a default investment option must provide both initial notices to individuals as they become eligible for the plan and annual notices as a reminder of these features. Generally, annual notices must be provided at least 30 days before the start of each plan year.

* The SECURE Act eliminates the requirement to distribute the initial and annual safe harbor notice to eligible employees for certain safe harbor nonelective contribution plans.

Questions?
Contact your Fidelity representative.

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