sec 125 plan document

[Guest taylorjeff]

I am a broker. We set up one of our group clients on a section 125 plan last summer (7/1). The service which provided the plan document now wants to charge the client again to "update" the plan. I know the sec 125 regulations were revised in 2000. Do the new regs require an extensive rewrite? This is a simple POP plan to shelter the employees's share of medical and dental premiums.

[SLuskin]

We amended every plan that we have after the IRS issued the final regs. I think that the timing was pretty close, as the regs were issued at the end of April and all the attorneys were scrambling to get the language just right. We did free upgrades for our clients who had purchased within the past 6 months. But the docs do need to be updated.

[GBurns]

From what I have seen and read I agree. Considering when the documents were done they should need up grading.

You might find that someone else might upgrade the documents at a better price, although price should be secondary to quality.

It might also give you an opportunity to get an opinion as to the quality of the documents. I have noticed a large percentage of questionable and deficient documents out there. In fact, I am now tending to agree with MHM who claim that nearly 90% of the plans that they take over are defective.