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Improperly filled out adoption agreement


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A prototype adoption agreement was incompletely filled out and signed December 1999, effective 1/1/99. Almost all (about 90%) of the entries were properly filled out, but a key entry (the normal form of annuity) was left blank. A brokerage account in the name of the plan was also established in December 1999.

Was the plan in effect on 1/1/99?

If the plan sponsor doesn't completely and properly fill out the adoption agreement, I believe (but please correct me if I'm wrong) that the plan sponsor cannot rely on prototype status; an IRS determination letter would clearly be advisable.

(If I'm wrong in this statement, then we have no plan for 1999 and the rest of this message is moot.)

Maybe we don't have a plan for 1999 because we don't have definitely determinable benefits. I'm concerned here, since the form of benefits is crucial (the few other entries left blank were minor). Can this be solved by amending the adoption agreement now (April 2000, unfortuantely, we're past March 15) retroactive to 1/1/99 specifying the normal form of annuity (and cleaning up the other stuff)?

FYI - the question for normal form of annuity had two alternative boxes to be checked -- (1) "Standard - Life Annuity", and (2) "Other", with a blank to be filled in. "Standard" was used throughout the adoption agreement; the plan sponsor checked the "Standard" box for virtually each question in which "Standard" was indicated. It could perhaps be argued that the intent(?) was for the normal form to be a life annuity? Hmmm.

Finally, if this can be deemed a qualified plan for 1999 (subject to determination letter request), what normal form of benefit should the actuary assume for 1999?

(I wished they called me 4 months ago!)

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