The Guide to Restatement

The Guide to Restatement Understanding the pre-approved plan restatement process

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The pre-approved plan restatement process has begun. During plan restatement you will adopt a new pre-approved plan document (formerly known as a volume submitter plan), which Fidelity has updated with required amendments, regulatory changes and other enhancements. The Internal Revenue Service (IRS) requires restatement of pre-approved plan documents every six years in order to maintain your plan’s tax-qualified status. Pre-approved plan documents include your Adoption Agreement and Basic Plan Document. As part of this process, your Service Agreement has also been updated with necessary changes and enhancements. Previously, this was accomplished by fully restating the Service Agreement. During this restatement cycle, we are addressing Service Agreement changes through a short amendment. We believe that this will help facilitate review and approval of the documents. Important note: The IRS has barred the inclusions of SECURE Act and CARES Act provisions into your pre-approved plan restatement documents. As a result, good-faith amendments that address the provisions will be provided at a later date. In this guide, you will find: • Introduction to the Guide to Restatement • Selected plan provisions • Steps and timeline

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Your responsibility Fidelity has made every effort to include your current plan provisions in the restated documents. Your careful review is necessary to ensure correctness and completeness. Your responsibility as a plan sponsor is to: • Review, approve and adopt your restated plan document and

signature-ready Service Agreement amendment. Execution of the Adoption Agreement and Service Agreement amendment indicates your approval of the provided provisions.

• Immediately contact your Fidelity Managing Director if the plan documents are incorrect or incomplete.

Fulfilling these responsibilities is critical to avoiding significant risks and potential liabilities concerning your Fidelity plan. Improper review of the documents could result in errors that may require costly corrections through the IRS Employee Plans Compliance Resolution System (EPCRS) Program.

This guide is not intended to cover: • Changes that seem immaterial or non-substantive (including

terminology changes such as “volume submitter” to “pre-approved plan”).

• Provisions that have been relocated within the pre-approved plan documents or Service Agreement, but not otherwise substantially modified.

Important note: This guide may describe some changes that do not affect your plan documents or Service Agreement amendment.

If you have any questions, please contact your Managing Director.

To help facilitate the restatement process, this Guide to Restatement generally addresses changes made to restatement documents for all clients—some of which may necessitate a closer review.

Introduction to the Guide to Restatement

The Guide to Restatement

Selected plan provisions

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Selected plan provisions

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Details about the Adoption Agreement structure: The Adoption Agreement previously included several Addenda, which only appeared when an applicable Plan provision was selected for your Plan. As a result of client feedback, the Adoption Agreement’s structure has been reorganized to form a more straight-forward group of Addenda. As a result, many provisions have relocated to a more intuitive location. Example: a compensation provision and a match provision may have both been formerly located on the Additional Provisions Addendum, but now one is located on the Compensation Addendum and the other on the Employer Matching Contributions Addendum. Key: AA= Adoption Agreement BPD= Basic Plan Document

Section(s) of plan Description of change

1.01(c) & Fiduciary Addendum of the AA

• At the Employer’s option, the role of Administrator can be split into two parts: (1) an Investment Fiduciary (i.e. the named fiduciary responsible for investment related decisions), and (2) an Administrator, responsible for all other administrative decisions.

• Additional information related to plan fiduciaries can now be documented in the Fiduciary Addendum.

1.01(g) of the AA and (former) Article 20 of the BPD

• Separates the Trust Agreement as a result of new IRS requirements. The separate Trust Agreement document contains all the same substantive terms from your previous AA and is included in the list of documents you received for your records. Execution of this separate Trust Agreement is not required to complete restatement.

1.04(b) of the AA • Eligibility Criteria for the below Employer Contributions may be listed separately: o Safe Harbor Matching Employer Contributions o Safe Harbor Nonelective Employer Contributions o Matching Employer Contributions o Nonelective Employer Contributions

1.05 of the AA and 2.01(k) of the BPD

• Includes new elections regarding the base definition for Compensation (W-2, 3401(a), and 415) and additional opportunities to further modify the definition through Section 1.05 and the Compensation Addendum. Unless your Plan had inclusions or exclusions from the definition of Compensation which aligned more closely with a different base definition, your Plan will be mapped to the W-2 definition which was the base in the prior document.

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1.07(a) of the AA and 5.03 of the BPD

• Removes Bonus and Additional Deferral options to instead reference procedures determined by the Administrator.

1.07(a)(4) of the AA and 5.03 of the BPD

• Removes Automatic Enrollment and Automatic Deferral Increase details (aside from those for a Qualified Automatic Contribution Arrangement and the permissible withdrawal for an Eligible Automatic Contribution Arrangement which will appear on the Automatic Enrollment Addendum to the AA) from the AA as those will now be captured in separate Administrator procedures. These procedures may now be updated at the Employer’s direction without requiring an amendment to the AA or Service Agreement.

1.09 of the AA and 5.06 of the BPD

• Includes additional choices to expand the group of individuals able to contribute rollovers to the Plan and the Roth in-plan conversion for otherwise non-distributable amounts (now within the AA where formerly appeared only in a good-faith addendum).

• Limits rollovers to those which are trustee to trustee.

1.11(a) and (b) of the AA and 5.08 of the BPD

• Gives a clearer indication of when Matching Employer Contributions are different for groups of Participants (now found on Matching Employer Contributions Addendum rather than in the Additional Provisions Addendum).

• Provides additional information about 401(k) Safe Harbor Matching Employer Contributions in this section rather than an addendum.

• Includes IRS-required clarifications regarding Additional Matching Employer Contributions.

• Removes the indicator for deemed satisfaction of the ADP test (which will now be determined by the amount of match contributed).

• For discretionary and additional Matching Employer Contributions the plan year following adoption of this document, adds an IRS-required communication to Participants within 60 days of the making of such contributions to the Plan summarizing the allocation, groups receiving and contribution period for such contributions.

1.11(e) of the AA • Allows a new option for different continuing eligibility requirements for a true-up on a Matching Employer Contribution.

1.12(a) of the AA • Gives a clearer indication of when Nonelective Employer Contributions are different for groups of Participants (now found on Nonelective Employer Contributions Addendum rather than in the Additional Provisions Addendum).

• Provides additional information about 401(k) Safe Harbor Nonelective Employer Contributions in this section rather than an addendum.

Selected plan provisions (continued)

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1.18 of the AA • Highlights the ability to choose not to accelerate loans upon termination of employment. This option was previously found in the Additional Provisions Addendum.

• Expands the timeframe to rollover loans when loans accelerate upon termination of employment as part of certain corporate actions (now 90 days).

1.19(a) of the AA • Provides a note that allows the Administrator to limit the frequency of hardship withdrawals.

1.19(b) and the In-Service Withdrawals Addendum of the AA

• Allows the withdrawal for age 59 ½ to be limited to certain selected sources.

1.26 and the Plan Superseding Provisions Addenda of the AA

• Describes specifically situations when the Employer cannot rely upon the Pre-Approved Plan’s Opinion Letter (formerly, Advisory Letter). Certain types of changes related to Title I of ERISA provisions and certain other changes to administrative and investment provisions do not impact your ability to rely on the Opinion Letter.

• Removes the Trust Superseding Provisions Addendum (as it becomes part of the separate Trust document).

Participating Employers Addendum to AA

• Adds an election to have all new Related Employers added as soon as administratively feasible (rather than standardly waiting until the end of the period described in Code Section 410(b) regulations) and the ability to indicate that participating Employers will not be allowed to continue to participate when they become unrelated.

Snap Off Addendum

• The Snap Off Addendum records information regarding the adoption of required good faith amendments. The only electable provision for the Plan is to provide the opportunity for Participants to be able to convert non-distributable amounts to Roth contributions.

Participation Agreement

• Includes a form page for the Employer to have each participating un-Related Employer execute and return to the Employer listed in 1.02(a) of the AA in accordance with IRS requirements (execution by participating Related Employers is not required).


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Bi-Partisan Budget Act (BBA) Addendum of the AA

• If you previously executed a separate good-faith amendment regarding changes to hardship distributions as a result of the BBA, this addendum will not appear in your AA.

2.01(o) of the BPD • Adds language to clarify the timing associated with an Effective Date which should provide a clear delineation between Plan Years, when needed.

2.01(cc) of the BPD • Clarifies that Hours of Service provided through a grant of predecessor employer service are considered as hours worked for the Employer for all Plan purposes (could impact continuing eligibility and other contribution determinations).

Article 8 of the BPD • Alters language to incorporate an Investment Fiduciary role. • Alters and removes some language as unnecessary for the Plan (e.g., adjustments as a

result of removal of the Trust and unnecessary language about Qualified Default Investment Alternatives).

• Moves former Trust Agreement language regarding life insurance investment constraints into this Article.

10.07 of the BPD • Removes restrictions on the form of payment available for in-service withdrawals.

13.01 of the BPD • Includes the ability for a Participant to increase the period of time over which installment payments would be made or stop them altogether (noting that required minimum distributions standards must still be met).

16.02 of the BPD • Adds clarifying language regarding how the Employer can make amendments to the loan procedures (board or similar resolution).

18.05 of the BPD • Removes the requirement that a Qualified Domestic Relations Order specifically provide for immediate distribution for the alternate payee to have such a right under the Plan (benefits always immediately distributable to alternate payees).

Bi-Partisan Budget Act (BBA) Addendum of the BPD

• Good-faith amendment Fidelity executed separately for the pre-approved plan to incorporate the changes to hardship distributions.


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Sections of Service Agreement amendment

Description of change

(1) • Updates the Fidelity legal entity responsible for the contractual relationship for the

Pre-Approved Plans to Fidelity Workplace Services LLC (the Fidelity affiliate which is responsible for services for all of the Workplace Investing plans).

(2) • Modifies the structure of existing Service Agreements to better align with Fidelity’s

new contract template layout. General recordkeeping terms and conditions will appear first, and all pricing will be reflected on a subsequent appendix.

(3)

• Removes the letter designation of each appendix, to instead refer to each appendix by title only. As more appendices will be in use in the future, some of which will only appear when needed, removal of the designations by letter avoids an appearance in the future that some appendix might be missing.

(4)

• Includes several small changes and clarifications (mostly due to the IRS program changes described above) with respect to Section 2 of the Service Agreement. Section 2 presents the basic terms and conditions surrounding use of the Pre-Approved Plan.

(5)

• Revises the descriptions of responsibilities surrounding investments as a result of the new option to add the role of an Investment Fiduciary to the plan.

• Reduces signatories for the Service Agreement to Fidelity and the Employer to better facilitate amendments in the future.

(6) • Updates any references to the Trust in the Service Agreement to conform to the IRS-

required changes regarding the Trust.

(7)

• Moves some provisions to have them situated with more similar content in the Agreement.

• Creates a division between any exceptional Service Agreement language (formerly on Appendix F) relating to terms and conditions of the Agreement and other exceptions (fees, services and plan document) to allow future changes to language surrounding services to be separately presented.

• Moves the FullView® offering from the terms and conditions area of the Agreement to the Additional Participant Offerings Appendix and updates the provision with clarifying language.

Selected plan provisions: Service Agreement amendment

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Sections of Service Agreement amendment

Description of change

(8) • Adds clarifications regarding the scope of services (for Plans with assets Fidelity does

not custody) and the broad use of the term “Participant” within the Agreement.

(9) • Adds language to clarify responsibilities regarding claims by Participants for benefits

under the Plan (claims administration) and availability of certain types of recoveries under the Agreement which are generally not contemplated in a contract for services.

(10)

• For Plans with Plan Exceptions, removes the old exceptions (done with every Plan document restatement) and indicates any new exceptions (if you had to supply Superseding Provisions Addendum language as part of this restatement) will be described on an Attachment to the Amendment.

(11) • If there were previously Trust Superseding Provisions in the Service Agreement,

removes those as they will now be associated with the Trust only.

Selected plan provisions: Service Agreement amendment (continued)

The Guide to Restatement

Steps and timeline

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Plan sponsors are required to review, execute and return your restated Adoption Agreement and Service Agreement amendment. The signed documents must be returned to Fidelity

within 45 days from your receipt of the documents.

Step one: preparation Review the documents included in the email: • Plan documents:

o Basic Plan Document, Adoption Agreement, Trust Agreement

• Service Agreement amendment

• Analysis worksheet (if included due to existing exceptions)

Engage reviewers as needed, which may include: • Counsel • Those responsible for

executing plan amendments, such as Board of Directors, committee members and/or other staff members

If changes are needed, immediately contact your Managing Director: • Do not make changes to the

documents directly • Do not complete steps two

and three

Step two: document execution Basic Plan Document and Trust Agreement: • No signature needed Analysis Worksheet, if applicable: • No signature needed Adoption Agreement and Service Agreement amendment: • Sign and date the execution

page by the appropriate individual(s)

Important note: You must sign these documents prior to the restatement effective date, as reflected in the documents. Execution of the Adoption Agreement and Service Agreement amendment indicate your approval of the provided plan and service provisions.

Step three: Fidelity countersignature and document return • When the signed documents

are received by Fidelity, we will countersign and return electronic copies for your records

Day 45: Deadline to return signed restatement documents

to Fidelity

Day 1: Fidelity emails your restatement

documents

Days 2-44: Review documents with counsel. Execute and return

to Fidelity.

SAMPLE TIMELINE

Restatement steps and timeline

For plan sponsor and investment professional use only. Approved for use in Advisor and 401(k) markets. Firm review may apply. Fidelity Management & Research Company and its affiliates do not provide tax or legal advice. Nothing herein or in any attachments hereto should be construed, or relied upon, as tax or legal advice. Please consult an independent tax or legal advisor for advice on your particular circumstances. The information in this email and subsequent attachments may contain confidential information that is intended solely for the attention and use of the named addressee(s). This message or any part thereof must not be disclosed, copied, distributed or retained by any person without authorization from Fidelity Investments. Fidelity Investments Institutional Operations Company LLC., 245 Summer Street, Boston, MA 02210 ©2020 FMR LLC. All rights reserved. 930331.3.0

Fidelity is committed to helping you successfully manage your pre-approved plan restatement process.

If you have any questions, please contact your Managing Director.

Documents

The Guide to Restatement