Amend groups after EE retires

[Sully]

Client has a Volume Submitter 401(k) plan with cross tested language. Plan has last day language for the profit sharing contribution with an exception for termination due to Early Retirement, Normal Retirement or Disability. Plan document provides for Doctors in one group and all other employees in the other group. One of the doctors in the group left the practice due to Early Retirement so he would normally be entitled to share in the profit sharing contribution for the year. Would it be possible to amend the plan before year end to establish a separate group for the retired doctor and elect to not fund that group?

[Mike Preston]

Technically, since he has satisfied the criteria for receiving an allocation, no. However, if you were willing to engage ERISA counsel to determine if the following is worth trying, then what about establishing a new group that has everybody in it other than that doctor and write the amendment such that the new group's allocation is not to be less than the previously existing group's allocation? Then submit for a letter (which probably won't be ruled upon because it is off-cycle, at least until it is too late).