Tack-On GUST Amendment Still Permissible for Terminating Plans?

[Christine Roberts]

The IRS Cincinnati office distributed a tack-on GUST amendment for terminating plans, some time back. Is it still an acceptable way to update a plan terminating in 2001? Would the answer be different depending on whether or not the plan intends to file a Form 5310?

[Guest earthy]

Yes, I believe so provided the plan being terminated is Master and Prototype plan. Based on a plain reading of Revenue Procedure 2000-27, terminating plans would be accepted with a "snap-on" amendment for GUST.

Section 3.04 of this same Rev. Proc. outlines some GUST exceptions for individually drafted plans as well.

earthy in Houston.

[Bob R]

I think it's still permitted for any plan -- prototype or individually designed -- subjec to the conditions in the Rev. Proc. So, if you had used safe harbor ADP/ACP provisions, the tack-on probably wouldn't work.

If you are filing Form 5310 you don't have much to lose by trying the tack-on amendment. If you aren't filing the form, you'd be better off using a recently approved protoype or volume submitter plan because that language has been approved. The tack-on amendment is technically not IRS approved - and you need to make sure you add the IRS model amendments for the addition of transportation fringes to compensation and the RMD regs (assuming you used the new rules).