IRA document amendment solutions

Understanding when to amend IRA documents is not always easy. We’re here to help.

Ascensus closely watches for law changes that affect IRAs. When amendments are required or recommended, we’ll help you stay compliant by guiding you through the amendment process.

Revised model IRA documents, once available, will fulfill the IRS requirement to amend existing IRAs for recent legislation. Unfortunately, the IRS has not provided indication as to when new models will be available. Therefore, until then, Ascensus recommends amending existing IRAs with a disclosure statement amendment for current changes as a result of the Further Consolidated Appropriations Act, Setting Every Community Up for Retirement Enhancement (SECURE), and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

What Needs Amending?

Amendments or new plan agreements and disclosure statements capture IRA rule changes, keeping IRAs up to date with the latest laws and regulations. Typically, the IRA plan agreement and the disclosure statement may need to be amended when major tax laws cause a material change in IRA documentation. The financial disclosure is never amended.

Why Amend?

Knowing why, when, and how to amend your IRA documents is important. Noncompliant documents and outdated information could lead to negative tax consequences for your clients and penalties for your financial organization.

Why Now?

Legislation throughout 2020 made some significant changes to IRA rules. New IRAs require disclosure statements that are up to date at the time of establishment. Amendments to existing IRAs are only required when the IRS mandates it, but many financial organizations update existing IRAs as a best practice without that mandate – or if there is a significant gap in timing of when a required, complete plan agreement and disclosure statement amendment is available to be sent to account owners. They do this so that their IRA owners know how their accounts are governed. In general, Ascensus strongly recommends amending existing IRAs for significant legislative and regulatory events. IRS Notice 2020-68 provides guidance on certain provisions of the SECURE Act, including a requirement for financial organizations to amend their IRA plan agreements and disclosure statements for SECURE by December 31, 2022, or a later date as prescribed by the Treasury Secretary. The IRS expects to issue revised model IRA documents; however, the Notice did not indicate when new models will be available. We also believe additional guidance is coming to clarify other provisions of the law changes, but the IRS has not indicated when that guidance will be released.

How we can help

The Ascensus IRA Full Disclosure Statement Amendment for SECURE Act can be used with any Ascensus IRA document. This amendment incorporates the following changes to IRAs.

  • Repeal of the age restriction for Traditional IRA contributions
  • Required minimum distributions (RMDs) to begin at age 72 instead of age 70½
  • More rapid payouts to nonspouse beneficiaries (with some exceptions)
  • An exception to the 10 percent early distribution penalty tax for qualifying births and adoptions

The amendment also incorporates changes to IRAs for the CARES Act.

  • Waiver of 2020 RMDs for IRA owners and beneficiaries, including those who turned age 70½ in 2019 but did not take their first RMD before January 1, 2020. Also, the year 2020 will not be counted for purposes of a five-year payout period for a beneficiary.
  • Ability to take penalty-free coronavirus-related distributions (CRDs) of up to $100,000 in aggregate from IRAs and eligible retirement plans and repay the distributions within three years.

Amendment Mailing Service

Purchase our Amendment Mailing Service and let us do the work for you. We’ll print and mail the amendment—and cover letter explaining the changes—to your Traditional, Roth, and SIMPLE IRA owners.

Paper

Buy hardcopy amendments for Traditional, Roth, and SIMPLE IRAs. With no minimum order requirement, order each separately and get exactly what you need—and a sample cover letter explaining the changes.

Copyright License

Get a copyright license and fulfill amendments in the way that works best for you—including electronic delivery. The cost of a copyright license includes amendments for Traditional, Roth, and SIMPLE IRAs, and a sample cover letter explaining the changes.

# of Accounts Amendment Mailing Service
cost per IRA, per type* (plus postage)
Paper cost per IRA, per type Copyright License cost for all IRAs
1-249 $7.57 $0.86 $250.00
250-499 $6.64 $0.78 $250.00
500-999 $6.64 $0.78 $383.00
1000-1499 $5.80 $0.69 $563.00
1500-1999 $5.35 $0.65 $655.00
2000-3499 $4.86 $0.60 $1,152.00
3500-4999 $4.02 $0.60 $1,740.00
5000-6999 $3.53 $0.53 $2,159.00
7000-9999** $3.12 $0.53 $2,861.00

Branding/customization quoted separately.

Ascensus’ standard amendment for all Ascensus IRA document clients for the SECURE and CARES Acts includes the Full Disclosure Statement IRA Amendment.

Are you unsure whether you’re current on past amendments, or are you ready to convert to Ascensus IRA documents?

We’ll help you find an amendment solution that works for you. Call 800-346-3860 or email salessupport@ascensus.com.

For the latest news on the SECURE Act and our industry’s response to COVID-19 and legislative relief, such as the CARES Act, visit the COVID-19 and SECURE Act News and Resources.