Repeal of Multiple Use Test

[Guest cjk]

The "multiple use" test was repealed by EGTRRA for the 2002 plan year. In your opinion, does a "moldel amendment" explicitly repealing the "multiple use" test need to be adopted by the end of the 2002? Or perhaps this is one of he "non-optional" provisions that does not need to be explicitly reflected in the plan document until the "2005 plan year,", the EGTRRA remedial amendment period?

[QDROphile]

Why avoid adopting the model amendment? Why do you want to deal with even the suggestion that you are not following plan terms? Why deal with the suggestion that the plan could decide to limit contributions more than the law requires by intentionally retaining the multiple use provisions as a matter of design?

[RTK]

Notice 2001-57 states that the amendment is required.

[Blinky the 3-eyed Fish]

The reasoning that the amendment is required is because there could be a scenario where the plan failed the MUT test and had to distribute dollars to the HCE's. This would be a violation of the 401(k) distribution restrictions.

[Guest slt]

An amendment to repeal the multiple-use test is generally required. You should see notice 2001-57 for a sample amendment. Note, however, that if your plan incorporates 401(m) testing by reference, then no amendment would be necessary to reflect the repeal.