Post PPA Reference Guide

12/19/2024 10:04 am CST

Checklist Item		Description of Change Made	Notes on "Mapping" or Defaults
Section A: General Information
General
	A.3a	IRS now requires plan effective date to be no earlier than beginning of the Plan Year (e.g., 01/01/2020 for calendar year plans); a plan can no longer have a retroactive restatement effective date (e.g., 01/01/2018).	Exception to this rule exists for plans set-up for the prior year per the SECURE Act.
	A.3b.i	IRS now requires restatement effective date to be no earlier than beginning of the Plan Year (e.g., 01/01/2020 for calendar year plans); a plan can no longer have a retroactive restatement effective date (e.g., 01/01/2018).
New	A.4	Per customer requests, new checklist items were added to address plan mergers. These fields are optional .	Will default to "No" on Post PPA.
New	A.5b.iii-.iv	Added ability to prorate service requirements in the event of a short plan year.
New	A.7b	New checklist items added so plans can be frozen as to eligibility or benefits - or both.	Answer from PPA will map into both fields (eligibility and benefits) on Post PPA.
Plan Features
New	A.12	New checklist item to address current safe harbor provisions in the plan. Selecting "Yes" will enable safe harbor questions in Section C, but selecting "No" will disable such questions.	PPA plans with safe harbor provisions will be mapped over with as "Yes" on Post PPA.
Definition of Compensation
	A.15	Definition of Statutory Compensation: - New option in drop down box for full 415 Safe Harbor definition (exclusion of amounts included in gross income attributable to medical or disability benefits, moving expenses, stock options, section 83(b) elections and non-qualified plans). - Used to determine annual benefit limits (e.g., 415 limit), HCE determination and top-heavy minimum benefits. - Is the base to which compensation items can be excluded, if any, for allocation purposes (Plan Compensation).	PPA plans using "415 Safe Harbor" (PPA A.19a) as the statutory definition have been mapped to "Section 415" (Post PPA). If you were using "415 Safe Harbor" and adding exclusions via PPA A.18b, you may consider switching to the newly-added 415 Safe Harbor definition and reviewing any additional exclusions entered in PPA A.18b.
	A.16	Definition of Plan Compensation: - Used to determine allocations of contributions. - Starting with the Statutory Compensation (defined in A.15), you can elect to exclude certain compensation items in order to define Plan Compensation. - Compensation excluded in A.15 (e.g., Post Severance Compensation) does not need to be re-excluded in A.16a, A.16b, or A.16c. - Exclusions are broken down by money type (Elective Deferrals [A.16a], Employer Matching Contributions [A.16b], and Non-Elective Contributions [A.16c]). - Once you elect to add exclusions for a certain money type, a list of possible exclusions enables. If no exclusions are desired for a money type, you can select "No" and eliminate the need to answer additional questions about that money type. - The definition of Plan Compensation for Elective Deferrals will apply for purposes of safe harbor contributions.	- PPA plans including military differential pay (PPA A.13e) will have that election mapped into Post PPA for all money types. - PPA Plans including "other pay" via PPA A.13f will not have that entry mapped into Post PPA. Please review any entry from PPA A.13f to ensure that it is captured in the Post PPA definition. - PPA Plans excluding other compensation (PPA A.18b) will be mapped over with "other adjustments" selected for all money types but the compensation definition entered in the open text field (at PPA A.18b) will not map over. If you were using A.18b to exclude other compensation for certain money types, please review the Post PPA compensation definitions to ensure that the other exclusions are applied properly.
	A.16b.i	Excluding pay earned before participation: For Elective Deferrals, this section is marked "n/a", or not applicable, because deferrals can only be made on currently available compensation. Therefore, compensation for Elective Deferrals only includes compensation available after the Employee becomes a Participant. See C.16 to include pay earned before participation for purposes of safe harbor contributions.
New	A.16b.v	Excluding Final Paycheck Pay: Although Final Paycheck Pay must be included in defining Statutory Compensation, it can be excluded when defining Plan Compensation. Final Paycheck Pay is compensation paid by the later of: (a) 2-1/2 months after an Employee's severance from employment with the Employer; or (b) the end of the Limitation Year that includes the date of the Employee's severance from employment with the Employer if: (1) the payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regular working hours (e.g., overtime or shift differential), commissions, bonuses, or other similar payments; and (2) the payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer.

Section B: Eligibility
Exclusions
	B.4	You can now specify the money types for which other employees are excluded instead of having to use the open text field.	PPA entry in open text field at B.4b is mapped over in full , and money types all default to "No". Edit check will fire if no money type is selected. If you are excluding other employees from Plan eligibility, we suggest reviewing your text entry to remove unnecessary language, and selecting any applicable money types.
Service Requirements
	B.9	Age requirement questions for the plan's applicable money types are grouped together (B.9a, B.9b, and B.9c) rather than being broken out by money type.	If your PPA plan had "Pursuant to Safe Harbor Rules" for either Matching or Non-Elective Contributions and your Safe Harbor Eligibility Requirements (C.2c) were anything other than "None - Same as Elective Deferrals", you will not have an age requirement mapped into the age field for Post PPA. An edit check will fire if the field remains blank. Please update these fields accordingly.
	B.10b	- The field used to indicate that Matching Contribution service requirements followed either Elective Deferrals or Safe Harbor Rules has been removed. - The following service requirement options were removed : "one and one-half (1-1/2) Years - Hours of Service" and "one and one-half (1-1/2) Years - elapsed time".	- If your PPA plan had "Pursuant to Safe Harbor Rules" for Matching Contributions and your SH Eligibility Requirements (C.2c) were anything other than "None - Same as Elective Deferrals", your Post PPA service requirement will map over as "Other" - you will need to complete the blank text field that populates or the system will generate an edit check error. Please update this field accordingly. - Other 'same as' eligibility requirements will map over from PPA to Post PPA. - Plans using 1-1/2 years of service will be mapped to "Other" at B.10b with 1-1/2 years of service being entered at B.10b.iii.
	B.10c	- The field used to indicate that Non-Elective Contribution service requirements followed Elective Deferrals, Matching Contributions, or Safe Harbor Rules has been removed. - The following service requirement options were removed : "one and one-half (1-1/2) Years - Hours of Service" and "one and one-half (1-1/2) Years - elapsed time".	- If your PPA plan had "Pursuant to Safe Harbor Rules" for Non-Elective Contributions and your Safe Harbor Eligibility Requirements (C.2c) were anything other than "None - Same as Elective Deferrals", your Post PPA service requirement will map over as "Other" - you will need to complete the blank text field that populates or the system will generate an edit check error. Please update this field accordingly. - Other 'same as' eligibility requirements will map over from PPA to Post PPA. - Plans using 1-1/2 years of service will be mapped to "Other" at B.10c with 1-1/2 years of service being entered at B.10c.iii.
	B.10d	PPA had one question per money type addressing how eligibility is treated if service requirements were not satisfied in the first Eligibility Computation Period - the possible answers were: 1) Rolling, or 2) Revert to 1,000 hours. Post PPA condensed those into one question that is applicable for all money types. Per customer requests, a new field was added where you can designate the number of hours that will be required rather than 1,000 being hard coded.	If all applicable PPA money types were set to "Rolling", Post PPA will be "Rolling"; however, PPA plans using "Revert to 1,000 Hours" for any money type will be mapped to "Revert" on Post PPA with 1,000 hours entered as the default.
	B.11-13	- Plan Entry Date and Entry Timing questions for the plan's applicable money types are grouped together (B.11, B.12, and B.13). - Entry Date questions have a new option: "first day of each payroll period".	- Non-Standardized PPA plans with "Pursuant to Safe Harbor Rules" for Matching or Non-Elective Contributions where the Safe Harbor Eligibility Requirements (C.2c) were anything other than "None - Same as Elective Deferrals", will map over to Post PPA as "Other dates" - you will need to complete the blank text field that populates or the system will generate an edit check error. Please update the plan's entry dates accordingly. - * The Standardized 401(k) plan does not have "Other dates" as an available option; mapping for that plan will go to "first day of the first month and seventh month of the Plan Year" with "next following" as the Entry Timing.

Section C: Contributions - Elective Deferrals and Safe Harbor
Elective Deferrals
	C.1	- Safe Harbor Contributions were moved down within this section to follow Elective Deferrals. - New checklist question asks whether a plan will impose minimum or maximum amounts on Elective Deferrals other than those imposed by Section 415. Selecting "No" will disable other questions related to minimum/maximum limits. - Maximum deferral amounts can now be set as a dollar amount OR a percentage of compensation. - Text field for entering the period to which a Plan's dollar limitation applies has been removed (PPA C.3a.ii). - Removed option to set a separate maximum for HCEs. Users should include HCE maximums at C.1c.	PPA plans using C.3c to limit deferrals by HCEs will have their limit mapped to Post PPA C.1c.i (other limitations on Elective Deferrals).
Automatic Enrollment
	C.4	You can now designate the type of automatic enrollment (ACA/EACA/QACA) from a drop-down list.
	C.4a	Administrative policies (PPA C.6a) can only be used to set the automatic enrollment provisions for traditional ACA plans. This checklist item will disable if "ACA" is not selected in C.4.	PPA plans utilizing the administrative policy feature will be mapped to an ACA plan on Post PPA.
	C.5	For application of the automatic enrollment provisions, a new option was added - "Only Participants whose entry date is on or after".
	C.7b	Removed the open text field for describing automatic enrollment increase provisions. Checklist questions now ask for a percentage by which automatic enrollment deferrals will increase and a maximum percentage to which deferrals will be increased. For example, if the plan provisions are designed to have an initial automatic enrollment of 3 percent which increases 1% per year to a maximum of 15%, you will enter "1%" at C.7b.i and "15%" at C.7b.ii.	PPA plans using "Yes - increasing percentage" for their automatic enrollment section will be mapped to "Yes" on Post PPA.
	C.7c	Automatic enrollment application delay (PPA C.6c) can only be used with traditional ACA plans. This checklist item will disable if "ACA" is not selected in C.4.	Plans using the delayed timing will be mapped according to other plan elections (e.g., if a plan used the delay and had elected to be an EACA, on Post PPA, the plan will be set up as an EACA).
New	C.9	Added checklist questions to specifically address the timing of both the first deferral increase and all subsequent deferral increases.
	C.10	Moved the checklist question dealing with permissible withdrawals for EACA/QACA plans into this section from Section G.
Safe Harbor Contributions
	C.13c	The question to indicate the effective date for safe harbor provisions is now optional.	- If a numerical date was entered previously, C.13c will be "Yes" and the previously-entered date will map to C.13c.i. - If a strictly text entry was used instead (e.g., "prior to the date of this restatement"), C.13c will be "No" on Post PPA. - Plans using a combination on PPA (i.e., safe harbor provisions are effective 1/1/2018) will map to C.13c being "Yes" but the date information will not map into Post PPA - an edit check will fire if C.13c is "Yes" and no date is entered in C.13c.i.
New	C.14	You can now indicate if the plan previously had safe harbor contributions, but is currently not a safe harbor plan.
	C.15a	Modified language to clarify an eligibility exclusion for safe harbor contributions - language now reads "HCEs who are Key Employees" rather than "HCEs and Key Employees". Key employees who are not also HCEs cannot be excluded as a stand-alone group.
	C.15c	Added options for safe harbor contribution service requirements to follow Employer Matching or Non-Elective Contributions (in addition to Elective Deferrals).
New	C.16	Added question to specifically address how pay earned before participation will be treated for purposes of safe harbor contributions.
	C.17	Questions relating to safe harbor matching contributions (i.e., matching formula) are now in Section C and are no longer grouped with Employer Matching Contributions in Section D. **By law, catch-up and Roth deferrals are always considered Matched Employee Contributions for safe harbor match purposes. There is no election in this section of the plan document to indicate otherwise. The election at D.7a and D.7b are only for non-safe harbor match provisions.	PPA safe harbor matching contribution formulas entered in Section D will be mapped into this section.
New	C.18	- You can now specifically select the timing for determining safe harbor matching contributions. This question determines when matching contribution amounts will be calculated. - Impact on true-up contributions: a true-up will be owed where the matching contribution is funded more frequently than the determination period. See Help Text for an example.	If your PPA plan is a safe harbor match plan, the determination election from PPA D.11a will map to this field. If you wish to use different determination periods for safe harbor and non-safe harbor matching contributions, please update this field or D.13a accordingly.
ADP/ACP Testing Elections
	C.19 - C.20	The ability to select ADP/ACP testing methods “with exceptions” was removed per the IRS.	Will map to the same election, but without the exception language (e.g., "Current year with exceptions" will map to "Current year").

Section D: Contributions - Employer Matching and Non-Elective
Employer Matching Contributions
New	D2 - D.2a	Changed wording for allocation conditions from Plan Year to "applicable period" for added flexibility. Added checklist question so you can set the "applicable period" for determining the satisfaction of allocation conditions (e.g., quarterly, monthly, etc.).	Plans will default to "Plan Year" to be consistent with how PPA was worded.
	D.3b	Changed wording for application of equivalency rules. PPA language was "Only Employees not paid on a per-hour basis" - Post PPA now reads "Only Employees for whom hours are not tracked". This customer-requested language change will a have limited impact for most plans. Where a plan has a salaried employee who must track their hours, this new language will allow hours worked to be counted rather than applying equivalency rules.	PPA will map to Post PPA as shown in the cell to the left.
New	D.4-4a	You can now indicate if prior service with a non-affiliated employer will be counted for purposes of satisfying allocation conditions.
New	D.5a	You can now indicate whether termination on the last day of the applicable period will be treated as being employed on the last day for purposes of satisfying a last day requirement.	Defaults to "Yes" when Plan has a last day requirement.
New	D.5e	You now have the option of modifying allocation conditions for participants who terminate due to attaining early retirement.	Software defaults to "No"; this question is only enabled for plans with an early retirement provision.
	D.6	Changed the selection from “do not automatically fix” to “corrective amendment” to clarify the use of a corrective 11(g) amendment.
	D.8	Post PPA has separate sections for safe harbor matching contributions and other Employer matching contributions.	Prior safe harbor formula will appear in Section C.
New	D.8a	Per the IRS, added a new field at Post PPA D.8a for plans using a discretionary matching formula. Users now must indicate whether discretionary matching contributions will be made based on a: 1) uniform percentage, 2) flat dollar amount, or 3) varying schedule set year-to-year by the Employer. Plans using option 3 will be required to provide a communication to participants. No communication is required for options 1) or 2).	Post PPA D.8a for Discretionary matching formulas will default to "Uniform percentage" so no participant notice is needed.
	D.9	Checklist item is the same - see notes on mapping from PPA to Post PPA.	PPA plans using a safe harbor match plus a discretionary Match (PPA D.7), will map over with a discretionary Match in D.8 on Post PPA.
	D.10	Checklist item is the same - see notes on mapping from PPA to Post PPA. Unless you update the document after conversion, PPA plans with a safe harbor match plus an additional fixed match will have 3 matching formulas on Post PPA: 1) the SH Matching formula (now in Section C); 2) a discretionary matching formula at D. 8; and 3) the PPA additional fixed matching formula mapped over from PPA.	PPA plans using a safe harbor match plus a fixed match (PPA D.8a) will have that formula mapped over in Post PPA in the same field (Post PPA D.10a) We are unable to map entries from the open text field at PPA D.8b into Post PPA D.8 for the primary match. Post PPA D.8 will be 'Discretionary'.
	D.12b	Plans using "Discretionary" at D.8, "Uniform Percentage" at D.8a, but also wanting to apply a matching limit (e.g., up to 6% of compensation) may do so within this field by entering the intended limit. Plan sponsors may allocate an Employer Matching Contribution up to the stated limit while maintaining a Uniform Percentage to avoid the participant communication requirement. See Help Text for examples.
	D.13a	Per the IRS, all plans must have a set determination period, even where the matching formula is discretionary. This question is now enabled for all plans with a matching contribution. - This question determines when matching contribution amounts will be calculated. *Timing of contribution funding is not impacted by any election in the document. - The Matching determination period must be equal to or longer than the "applicable period" in D.2 which sets the time frame for analyzing whether allocation conditions have been satisfied for a certain period. - Removed the option for funding "At Company discretion" per the IRS. - Impact on true-up contributions: under the PPA BPD, true-up contributions were optional. With the new guidance from the IRS concerning determination periods, a true-up contribution will be owed where the matching contribution is funded more frequently than the determination period. See Help Text for examples.	- PPA plans using "At Company discretion" will be mapped to "End of the Plan Year". - "End of the Plan Year" is also the default for plans with a discretionary formula for which the question is newly-enabled.
Non-Elective Contributions
New	D.16 - D.16a	Changed wording for allocation conditions from Plan Year to "applicable period" for added flexibility. Added checklist question for users to be able to set the "applicable period" for determining the satisfaction of allocation conditions (e.g., quarterly, monthly, etc.).	Plans will default to "Plan Year" to be consistent with how PPA was worded.
	D.17b	Changed wording for application of equivalency rules. PPA language was "Only Employees not paid on a per-hour basis" - Post PPA now reads "Only Employees for whom hours are not tracked". This customer-requested language change will a have limited impact for most plans. Where a plan has a salaried employee who must track their hours, this new language will allow hours worked to be counted rather than applying equivalency rules.	PPA will map to Post PPA as shown in the cell to the left.
New	D.18-D.18a	You can now indicate if prior service with a non-affiliated employer will be counted for purposes of satisfying allocation conditions.
New	D.19a	You can now indicate whether termination on the last day of the applicable period will be treated as being employed on the last day for purposes of satisfying a last day requirement.	Defaults to "Yes" when Plan has a last day requirement.
New	D.19e	You now have the option of modifying allocation conditions for participants who terminate due to attaining early retirement.	Software defaults to "No"; this question is only enabled for plans with an early retirement provision.
	D.20	Changed the selection from “do not automatically fix” to “corrective amendment” to clarify the use of a corrective 11(g) amendment.
New	D.23	New checklist item allows you to elect to use the 2-step permitted disparity integration method even if the plan is top-heavy. Applies when the Non-Elective formula is "Integrated".
New	D.24	For plans using 'Points' method for the Non-Elective allocation, a new checklist item was added to allow users to set the compensation amount used to determine points award. PPA language was hard-coded to be based on $100 of compensation.	PPA plans using 'Points' will have $100 mapped over. Default answer will also be $100.
	D.26a	Added an option to set the Non-Elective determination period to be "At such times as may be determined by the Employer".
Collectively Bargained Employees and Prevailing Wage
New	D.28a.i	The IRS no longer allows documents to reference outside documents, like collective bargaining agreements. New checklist item was added to allow users to insert CBA terms relative to contributions.
New	D.29	- PPA had separate questions for PW as a Profit Sharing or as a QNEC. Post PPA merges those questions (D.29a) - the account into which contributions are made will dictate the characterization of funds, not the adoption agreement. - You can now use D.29a.i to establish which document will be used to set the job classification and hourly rate for workers receiving PW contributions. - You can also modify the default application and vesting provisions for PW contributions (D.29b).	- PPA entries for Prevailing Wage contributions (whether as Profit Sharing or QNEC) will map into the Post PPA field. PPA plans with two formulas (Profit Sharing and QNEC) will have only the QNEC formula mapped over. If your plan is using two formulas you may want to update the entry at D.29a.ii. - PPA plans excluding certain employees from receiving PW contributions will have that information mapped over.
	n/a	The IRA effective date field (PPA D.28b) was removed.

Section E: Vesting
Vesting Service Computation Rules
	E.2b	Changed wording for application of equivalency rules. PPA language was "Only Employees not paid on a per-hour basis"; Post PPA now reads "Only Employees for whom hours are not tracked". This customer-requested language change will a have limited impact for most plans. Where a plan has a salaried employee who must track their hours, this new language will allow hours worked to be counted rather than applying equivalency rules.	PPA will map to Post PPA as shown in the cell to the left.

Section F: Distributions
Time and Form of Payment
	F.4a	The distribution option 'cash or in-kind to a specified vendor' was removed.	Will map to 'cash or in-kind'.
New	F.5c	Added checklist question to permit partial or installment distributions only for purposes of satisfying RMDs when Plan provisions otherwise only allow lump sum distributions.	Defaults to "Yes" when enabled. Item is enabled if no other partial withdrawals are allowed.
Transfer Plans
New	F.7b - F.7d	You can now add detailed information on transfer assets. These fields are optional.
Spousal Questions and Domestic Partners*
	F.10b	Per the IRS, spousal beneficiary designation can only be automatically revoked in the event of a legal divorce. Checklist item has been updated to specify divorce as the only available event. The open text field has been removed.	PPA plans answering "Yes" will map to "Yes" on Post, but without any fill-in-the-blank text box. Prompt text assumes divorce only.
	n/a	*Removed all questions related to domestic partners per the IRS and legislative updates
Force-out Provisions
	F.11	Changed wording to be "force-out" instead of "cash-out" to reflect that some balances are rolled to IRAs rather than being cashed out.
New	F.11c	New checklist item allowing users to designate an amount (up to $1,000) over which balances will be rolled to an IRA instead of being cashed out. PPA allowed this via language in the BPD, but now there is a specific designation in the AA where users can set an amount.	Will default to $1,000.

Section G: In-Service Withdrawals
	G.11	Clarified language of question to make clear that where full vesting is required by plan terms, the vesting relates to individual contribution accounts, not the Participant's total balance. Please note: the wording of this question has been changed - rather than asking if in-service distributions can be made from partially vested accounts, Post PPA now asks if the distributing account must be 100% vested. This language change may require an adjustment to your ZZZ Defaults or your approach to setting up new plans. This question was also moved down within this section (from #1 to #11).	Mapping from PPA to Post PPA will account for the change in language.
	G.13c	The option to choose “Distributions from the In-Plan Roth Rollover Account permitted at any time” was removed per the IRS.	Converted or new plans will default to "Preserve existing distribution rights for each Account".
	n/a	The effective date fields for In-Plan Roth Rollover questions (PPA G.13c and G.13f) have been removed.
	n/a	Loan provisions no longer appear in Section G of the Adoption Agreement. All loan questions remain in Section J of the checklist and will still populate in the Loan Procedures document, but there is no longer a document provision addressing the availability of loans. Plan amendments will no longer be needed to add or remove loan provisions.

Section H: Plan Operations, Investments, and Top-Heavy
Permitted Investments
New	H.1a - H.1c.i	Questions relating to qualified employer securities and qualified employer real property have been expanded. You can now specifically address which account(s) can invest in such investments. You can also establish any restrictions on distributions from those investments. Please note: the wording of this question has been changed - rather than asking if a plan can invest up to 100% of plan assets in such investment vehicles, Post PPA assumes that plans may do so and asks instead if you would like to apply restrictions to such investments. This language change may require an adjustment to your ZZZ Defaults or your approach to setting up new plans.	- To completely disallow investments in QES or QERP, we suggest answering "Yes" to H.1a, entering language at H.1a.i to indicate that the investments are not allowed, and then selecting "No" for H.1b and H.1c and letting the language in H.1a.i stand as a universal prohibition on such investments.
Trust Provisions
	n/a	All checklist items related to trust provisions have been moved to Section J. The Trust provisions will now be in a separate document from the plan document/BPD. *There is no longer a Trustee signature spot on the AA or Plan Document because of this change.
Claims Procedure Limitations
	H.7 - H.7a	The wording was updated from "Statute of Limitations" to be "Claims Procedure Limitations" to allow for added flexibility in terms of the limitations that could be captured within the text field.	If your PPA plan had an entry in H.7.i (PPA) that entry will map over to Post PPA.
Top-Heavy Plans
	H.9a	You may now select “N/A – Vesting schedule is Top-Heavy Compliant” from the list of options for the Top-Heavy Vesting Schedule.

Section J: Administrative Elections - Trust, Loans, SPD and Form Customizations
	J.10 - 12	Per the IRS, the Trust Agreement must now be a separate document - the trust provisions cannot be in the adoption agreement or the Plan Document. We have moved all trust questions to Section J, and entries there will populate in the "Trust Only" document (found on the Print Plan Documents page) for plans using the FTW Trust Agreement. - Plans using the FTW Trust Agreement: Trust Agreement will need to be signed by the Plan Sponsor and the Trustee . We added an effective date field that can be used to populate the date of the agreement (J.10b) We removed the checklist question asking for the identification of a special trustee who determines and collects contributions (PPA H.5f) - Plan Sponsors no t using the FTW Trust Agreement can still enter Trustee information for purposes of populating the SPD and Consent Action documents.

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