Cross-tested groups

[Guest Ashley]

If a profit sharing plan does not have a last day or hours requirement, is it still possible to change the number of groups listed in the plan document?

[Mike Preston]

You will get conflicting answers on this. And those conflicting answers come from within the IRS. It appears that many of the folks that attend conferences say no. I have had discussions with technical people in Cincinnati who are adamant that TAM 9735001 does not apply to amendments made before the end of the year and that say it is ok to amend the allocation methodology up until the end of the year in a profit sharing plan with no fixed contribution even though there is no EOY employment requirement and/or no hours requirement.

However, if a contribution has already been made for the year, a participant would be entitled to a share of that contribution based on the language in the plan on the date the contribution was made.

Safest approach?

Do the amendment, submit to IRS, identify the issue and don't make any contribution to the plan until the IRS has provided guidance. At that point, the decision can be made as to what to contribute based on an approved IRS methodology.

[Blinky the 3-eyed Fish]

Of course you do not say what the change in groups is or what it is designed to do. Based on that answer you may have other options.

Andy, I added the missing word and removed the extra one.

[AndyH]

Blinky, shall we zap that incoherent message? Are you consuming mass quantities (with other people from France) amidst a Christmas party?

[Mike Preston]

(burp)