Make sure you update your plan on time. Missing the restatement deadline could trigger the IRS to disqualify your retirement account. A resulting penalty for missing the deadline could be that your contributions will no longer be deductible or that the funds already in the account can be distributed creating a taxable event. Furthermore, for a Roth 401k, future earnings will lose their tax-favored status. Lastly, it is possible to evoke a late adopter procedure for a missed deadline. However, you should expect to pay hefty fees set by the IRS.