Amending/Restating for Termination: Style & Substance Question

[Guest Much2Learn]

I am wondering if, when terminating a plan, it is imperative that the document is restated in a way that style, content, plan specs, etc. are as close to the old document as possible?

The reason I ask:

This client's plan was adopted in 1996 on a Corbel Volume Submitter document. Due to the death of the business owner, the client is terminating the plan effective 12/31/2002.

We switched to the Datair Document System this past year. Unfortunately, Datair's Volume Submitter is older than Corbel's 1996 Volume Submitter :eek: . . . Datair's Non-standardized Prototype is current though.

All of the features of this terminating plan can be selected on the Prototype, with the exception of the profit sharing contribution, which provides for an age weighted allocation. Sigh.

Is it un-kosher to amend and restate a terminating plan, and submitting an entirely different document (prototype vs. volume submitter), with a slightly different allocation formula (points allocation vs. age weighted)?

Or, should we wait for Datair to come out with its Volume Submitter, and start the termination process when we have that?

[Guest merlin]

Have you tried contacting DATAIR to find out the status of their vs plan? You said that the temination date is 12/31/02. That gives you 3-1/2 months to before you have to start thinking about cobbling a document together.

[Guest LKHartnett]

Trust me . . . we're sweating.

90% of our clients are supposed to be amended and restated on the Volume Submitter, so this client isn't the only one who we're going to have to prepare an 11th hour document for.

[Guest merlin]

Maybe I'm missing something (wouldn't be the first time). If DATAIR hasn't gotten their last vs advisory letter yet,their 12-month clock hasn't started ticking. The 11th hour appears to pretty far into the future.

[Guest LKHartnett]

We're operating under the understanding that our plans have to be amended/restated by 12/31/2002 for GUST and EGTRRA.

Some of our plans are new enough that all we've had to do is amend, but our older plans, most of which are on Corbel Volume Submitters, have to be restated.

This time last year we switched from Corbel plan documents to Datair. At the time we made the switch, we were under the impression that Datair's Volume Submitter would be approved within the next few months . . .

[Guest merlin]

Notice 2001-42 states the 12-month rule for vs plans. The notice also extended the 12-month rule to include the adoption of an EGTRRA "good faith" amendment.But anti-cutback considerations might require earlier adoption of the EGTRRA amendment. See the article by Robert Richter in the Sept./Oct. 2001 edition of The Pension Actuary for a good plain-language description.If you don't have it,give me your fax # and I'll send it to you.

One question: Why isn't DATAIR telling you this?

[Guest LKHartnett]

Thanks! The fax number is (518) 785-0299.

I think Datair is overwhelmed by a number of issues. Another extension window probably wouldn't absolve them of a deadline in most of their customer's eyes. We, for instance, paid for licensing rights to a Volume Submitter that should have materialized a year ago.

But, not only is Datair trying to get all their documents approved by the IRS by the year's end, they are also updating their document AND recordkeeping systems from DOS to Windows . . . yes, in this day and age . . . so their hands are full. What can you do but nag . . .

[Guest LKHartnett]

Fax received! Thanks!