Defined Benefit Plan Document

[Guest Kathleen Fouquet]

Did Defined Benefit plan documents have to be updated at the same time DC plans were updated for TRA '86, UCA '92, OBRA '93? My client has an old DB document (mid 80s). Is the plan out of compliance?

[david rigby]

"GUST-ification" for all qualified plans is required by the last day of the plan year which begins in 2001.

If you have a plan which pre-dates 1989, then it probably is not updated for TRA86. Problem.

[Guest Kathleen Fouquet]

So, based on your answer, DBs needed to be updated for TRA '86, but then not for anything else until the current GUST amendments. Is that correct?

[Guest Keith N]

I would tack on to PAX, that it's not just a "problem", but potentially a BIG PROBLEM!

If doc was amended for TRA 86 but not submitted for determination letter than you may have a problem getting a GUST determ letter without a TRA letter, but at least you haven't broken any rules. (your not required to file for determ letters).

If the plan doc was never amended for TRA 86, now you have broken the law and you have a big problem. This use to be a "walk in CAP" type issue, but with the new APRSC regs there may be an easier way. Either way, it's not going to be a pleasant experience to get a GUST letter.

We had two of these shortly after the TRA deadline ended. In both cases the "penalty" was $5,000, not to mention the legal, actuarial, and user fees on top of that.