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FTWilliam is the provider I know that promptly produces amendments and makes them available to plans/ customers.

Yes, I understand the problem. It’s a result of employers expecting to get all plan documents from nonlawyer service providers. And of a documents regime not built for promptness. If you can produce your SECURE/CARES amendment for a fee your client doesn’t choke on, that’s likely ten times more efficient than asking the recordkeeper.

As does Relius

I wouldn't think the participant pays back the withheld taxes, but rather just his 80% amount. A revised 1099-R would need to be issued, and I'd think the sponsor would amend its 945 filing to illustrate the overpayment of the taxes due. So that gets the sponsor the credit for the tax amount. The 1099 shows $0 for the second year, and no withholding "credit" either, for the employee. I don't know if the EFTPS folks would send BACK to the sponsor the overpayment of federal taxes, but the sponsor should be able to apply that excess against a future amount due for the next guy to be paid out, no?

It's pretty common for large plan providers not to have interim amendments or termination amendments ready to go at any time a client decides to terminate a plan. We've done a number of good faith termination amendments for other providers' pre-approved plans to bring them into compliance with current law before they terminate and we've had clients execute those amendments after the termination date as well. In fact I can't recall a time when such an amendment was available from the provider. Because we're a law firm that has its own pre-approved plans as well, we generally have some type of termination amendment template that we continue to update as guidance comes out and that we can individualize for another provider's plan. I realize it becomes more difficult when you're not the provider drafting the plans and it can be time-consuming to review the RA lists and draft language for an amendment. As Peter points out, the amendment won't have reliance regardless of who prepares it. And I'm guessing that's why the risk-averse large providers don't provide one.

Would seem to be a creative and reasonable approach. Not completely predictable of course because your dealing with discretion and personalities. If there was nothing unusual in the plan's facts that pushed the ADP to the low side for the first months of the year, you'd think it should be OK.

Non-ERISA... and you're auditing what exactly that requires you to question non-discrimination?? Otherwise, yes a retroactive amendment to the Plan for the 'Principal' class of employee. Otherwise, out of the eight(?) ways you can run non-discrimination, one of them should pass just fine, unless the principal is only 22 years old.

The American Institute of Certified Public Accountants’ Auditing Standards Boards’ Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA, Statement on Auditing Standards No. 136 (July 2019) applies only for audits of the financial statements of an ERISA-governed employee-benefit plan. Its first numbered paragraph states: “This SAS should not be adapted for plans that are not subject to ERISA.” If your engagement’s scope is only an audit of a church plan’s financial statements with no added agreed-upon procedures, your firm might evaluate whether it is necessary or appropriate to consider whether the plan meets or fails an Internal Revenue Code § 403(b)(1)(D) non-discrimination condition. Even a failure of such a condition might be immaterial, insignificant, or even irrelevant, in some circumstances, to a plan’s financial statements. Consider also, in a particular church plan’s facts and circumstances, whether a § 403(b)(1)(D) nondiscrimination condition applies. See I.R.C. (26 U.S.C.) §§ 403(b)(1)(D), 403(b)(12)(B), 3121(w)(3)(A) (referring to “an elementary or secondary school which is controlled, operated, or principally supported by a church or by a convention or association of churches”).

Unless you’re already confident that the school’s plan is administered by or under the control of a church so that it is a church plan not governed by ERISA, your firm might evaluate whether the plan is “non-ERISA”. The plan provisions you describe seem logically inconsistent with saying there is no plan the employer established or maintains. After you’ve sorted out what kind of plan this is (and the scope of your engagement), you’d consider whether you should consider a nondiscrimination issue, and (if you do) which tax-law provision governs.

It is most likely there.

This might be a case where the amendment was poorly drafted. Or not. IMHO, you should follow the plan document. Likely, this will mean no credit for the short PY; ie, don't impute proration if it isn't there. However, it's probably very important for someone to ask the plan sponsor: what result did you intend? It's possible an additional (clarifying) amendment is the solution.

What does the Plan Document say?