410(b)(6)(C) Transition Rule - Required in Plan Document?

[KJ2]

It seems that most (all?) prototype/volume submitter plan documents that I have seen explicitly reference the 410(b)(6)(C) transition rule as either a default in the basic plan document or an election within the adoption agreement.  As a result of this practicality; I have always assumed that, in order to take advantage of the 410(b)(6)(C) transition rule, it must be explicitly stated in the terms of the plan document.  

I am now confronted with a prospective client's plan that is being spun-off from an individually designed MEP. The MEP document does not reference 401(b)(6)(C) or the transition rule at all but the sponsor of the MEP claims that "while the plan document does not specifically reference the rule, the plan covers it."  My gut reaction was to "call BS" on that but, being a careful person, I thought I should try to look for some actual support for my position.  Unfortunately, I came up with nothing.  

Any thoughts, guidance or insight (or even better a citation) that anyone can offer regarding whether it is necessary for an individually designed plan to include explicit reference to the 410(b)(6)(C) transition rule in order for the sponsor to take advantage of it?

Thanks.

[ETA Consulting LLC]

I never saw it as a requirement to be in the document in order to apply.  It's a controlled group rule (basically saying that even though your numbers equate to you being a controlled group (due to an acquisition or something), you're treated as not being a controlled group for a certain period of time (which basically gives you time to perform the analysis and determine how you're going to operation going forward).

Good Luck!

[CuseFan]

You have two separate applications here: (1) the definition of eligible employee in the plan document and (2) how you do your coverage and nondiscrimination testing. Say you have a M&A transaction and the definition of eligible employee is simply any employee of the employer within the control group. The transition rule doesn't help you and those new/merged employees are now eligible (and maybe immediately if prior service was required to be counted), which is why that language now shows up in most (all?) preapproved documents. You can choose whether or not to apply the transition rule in your testing, but you have no after-the-fact option on the documents definition of eligible employee.

[KJ2]

Thank you both for the replies.  

Also, CuseFan, appreciate the details and example.  I was definitely merging both of those issues together as I considered this situation which resulted in my confusion.