Deadline for amending plan document to switch current / prior year ADP

[MWeddell]

Employer sponsors a 401(k) plan with a calendar year plan year and individually designed plan document. Hence, the GUST remedial amendment period ended 2/28 and the 2001 plan year ended 12/31/2001. The plan document provides for 2001 and future plan years that the prior year testing method is used for ADP testing. We'd like for the employer to amend the document now (April 2002) to change for 2001 and future plan years to the calendar year testing method. Is this permitted?

They have been several threads on this question in the past, the most useful of which is

http://benefitslink.com/boards/index.php?showtopic=13800

in my opinion, but now that the GUST remedial amendment period has ended, it becomes a tougher issue to resolve.

[Blinky the 3-eyed Fish]

I assume you mean you want to switch to the current year testing method, not make a calendar year election, which would be unavailable to a calendar year plan.

You can always amend the plan without restriction to go from prior to current year, regardless if it is past the remedial amendment period or not. But that was stated in the link to the post you referenced, so why doesn't that answer your question?

[MWeddell]

Yes, I want to switch to the current year testing method -- sorry for the typo.

I know that in the abstract it's not a problem to switch from the prior year testing method to the current year testing method. My question is can the amendment to the plan be done at this point in time, April 2002 for an amendment effective for the 2001 plan year.

[KJohnson]

This is from the 1999 ASPA conference. I am not sure whether the IRS has changed its tune or not.

60. Informal comments have been made by IRS representatives regarding the timing of an amendment to change the testing method used for the ADP or ACP test. Specifically, the issue is whether the method (e.g., current year method) must be specified in the plan before the plan year begins or whether the amendment can be made after the plan year has begun (or even made after the plan year has ended). Is this still the "informal" opinion of the IRS and if so, what is the rationale for this interpretation?

This is still our conclusion. This will be discussed from the podium.

MWeddell,

I think you said that your boss threw out the 1999 Q&As. You can still find them on line in an ASPA archive file. Try this link

http://www.aspa.org/archivepages/gac/1999/99irsq&a.htm

[MWeddell]

Thanks, KJohnson. It wasn't my boss that threw out the gray book Q&As, but everything else in your post is helpful. It at least lets us know the IRS' informal position, but there's not much to back up their informal position.

[KJohnson]

I got the names confused. It was mwyatt.

[Guest qualified plan]

Does anyone know if this is still the IRS' position?

Thanks.