Transition to ERISA Plan Status - What is Initial Effective Date?

[Christine Roberts]

A private nonprofit has had a non-ERISA 403(B) arrangement for its employees for some considerable time.

Employer now wants to add matching contributions and is establishing an ERISA plan in order to do so. Is the initial effective date for the plan: (A) the date the new plan is established or (B) the date the non-ERISA 403(B) arrangement first came into existence?

Does it make any difference that the employer "memorialized" the terms of the non-ERISA plan, in writing, sometime in 2000? The written summary of terms does not contain all info. required under ERISA.

[Carol V. Calhoun]

For what purpose do you want to know the original effective date? If you are restating the documents for the plan, you would normally put that the initial effective date was the date the prior plan was adopted, but that the restatement effective date was the date as of which the employer began making contributions. However, the initial date upon which ERISA became effective as to the plan would not be before year the plan became subject to ERISA.

Memorializing the terms of the arrangement would not make it subject to ERISA, if it was otherwise exempt.

[Christine Roberts]

The "prototype" (used loosely) plan document checklist requests initial effective date, and restatement date.

My first instinct was to use the date the employer first allowed deferrals to a TSA, as the initial effective date, but no one seems to remember when that was.

Since there wasn't a "plan" per se under the old regime, and no 5500 filings, it is still the best approach to use that date as the original "effective" date of the plan and treat the transition to ERISA status as a "restatement"?