Effect on Rem Amend Period when amending prototype

[Guest Ruth Glaser]

What happens if...

A sponsor with an individually designed plan document signs (before 12/31/2001) a certification that it intends to adopt a prototype. The prototype does not become available (because of IRS timing on issuing the opinion letter) until after 1/1/2002. The sponsor then discovers that its plan features don't all fit into the prototype, and the sponsor amends either the adoption agreement or the basic plan document. I know that the IRS may then come back and determine that this plan is no longer a prototype, but is an individually designed plan. Has this plan sponsor now missed the deadline for timely amending for GUST? I haven't seen anything hard and fast from the IRS, but what is the industry consensus? Thanks.

[KJohnson]

You might want to look at the following from 2000-20 Either of these may fit your situation:

04 Period of Extension - If the preceding requirements are satisfied, the remedial amendment period for the employer's plan will not expire before the end of the twelfth month beginning after the date on which a GUST opinion or advisory letter is issued for the M&P or volume submitter specimen plan referred to in subsection .03 or the opinion or advisory letter application for the plan is withdrawn. Within this period, the employer must amend or restate its plan by adopting the GUST-approved M&P or volume submitter specimen plan (or another GUST-approved M&P or volume submitter specimen plan, or individually designed GUST amendments) and, if required for reliance, request a determination letter.

.06 Certain Employer Amendments Disregarded for Purposes of This Section - An employer that has adopted an M&P plan or a volume submitter specimen plan may have modified the plan in a such a way that the plan, as adopted by the employer, would not be considered an M&P plan or a volume submitter plan. Nevertheless, for purposes of this section, such a plan will be treated as an M&P or volume submitter plan and will be eligible for the remedial amendment period extension provided by this section. For example, an employer may have adopted an individually designed GUST-related amendment to an M&P plan that would have caused the plan to be considered an individually designed plan under section 5.02 of Rev. Proc. 89-9. Despite the individually designed amendment, the plan will be treated as an M&P plan for purposes of this section.