Plan termination in 2002

[R. Butler]

We have a Plan that has informed us considering terminating their 401(k) at the end of this year and doing a SIMPLE-IRA in 2003. They have until 12/31/02 to update their 401(k) document. If they decide to terminate the 401(k) in 2002, do we have to still put them in a new document or can we just use "tack on" amendments, similar to how we have handled it the past few years?

[actuarysmith]

Our firm has taken the position that you cannot use the "tack on" method in good faith if you already have an approved prototype document.

Many of the document providers have already obtained approval letters. If your firm uses a provider that has not obtained a letter, you could probably use a tack on in good faith.