GUST Deadline - New Plan

[Guest Rand]

My client XYZ was organized and established a new individualized Plan in May 2001. XYZ tax year and plan year are calendar years. The general GUST amendment and IRS submission deadline is December 31, 2001. But the general remedial amendment period for this new plan would be due date of employer's 2001 tax return or March 15, 2002 (plus extensions). Does anyone have any thoughts as to whether this Plan would need to be submitted to the IRS by December 31, 2001 or by March 15, 2002 (or extended due date)?

Also do you think it would make a difference if XYZ and XYZ Plan were established in connection with an asset purchase of another company's ABC Division, where all employees of the ABC Division became XYZ employees upon deal closing, and the assets attributable to their benefits in the seller's plan were transferred to the XYZ Plan. The seller's plan had a TRA '86 determination letter, was not yet amended for GUST when the transfer occurred, presumably seller plan will be GUST amended and submitted by the seller by December 31. (Seller Plan is a large plan covereing all the other Seller's employees -- the ABC division was just one division of the Seller Company.)

If anyone else has given thought to this situation, your thoughts would be appreciated. I have 3 or 4 situations similar to this one, and having until the tax return due dates in 2002 would be helpful...but I certainly do not want to miss the GUST deadline!! Thanks.

[david rigby]

A few thoughts.

You are not amending for GUST, so the remedial amendment period is not relevant (?).

December 31, 2001 is probably relevant only in the sense that the plan must be formally adopted by the last day of the fiscal year for which you are taking the deduction (or is it March 15, 2002?). And this plan document should already be "GUST-ready".

You never have to submit a plan to the IRS for a determination letter, although most consultants, attorneys, auditors, etc. will advise you to do so.

[Guest RBJ]

:confused:

I agree with pax's analysis and think the general remedial amendment period would apply and that a det. ltr. application by December 31 will not be necessary.

This raises a related question I have for "newly adopted" plans.

Rev. Proc 97-41 stated in section 6.05:

"In addition, the remedial amendment period with respect to all disqualifying provisions of new plans adopted or effective after December 7, 1994.....will not expire earlier than the last day of the first plan year beginning on or after January 1, 1999"

The January 1, 1999 date was the original GUST deadline and is now January 1, 2001 (meaning we have until the end of the 2001 plan year to amend for GUST and that for plans adopted after 12/7/94, the remedial amendment period will be open for GUST and non-GUST disqualifying provisions).

My question is how this special rule for newly adopted plans applies in the case of a non-standardized prototype. If the employer has adopted a "GUST" prototype (for which the sponsor has not obtained a letter yet) or has certified it intends to do so, does the extra year given to the employer to adopt the non-standardized GUST prototype also extend to the non-GUST disqualifying provisions or do I have to submit a det. ltr. request by 12/31/01 for the non-GUST provisions and turn around and apply for a GUST letter next year, and turn around and submit for an EGTRRA letter...

This one has me stumped!