Is current year ADP election tied to GUST RAP?

[Kathy]

Once we're all amended for GUST, we must use prior year ADP test results for Non-HCEs to determine amount current year HCEs may defer as the default method. If we choose to use current year results we must document this fact and stick with it for at least 5 years - right?

However, during the GUST RAP we were allowed to continue to use current year without obligating the employer to stick with that method for the 5 years following the year on which we were working, right?

So, for my employers whose remedial amendment period has been extended yet again, may I use current year for calendar year 2002 and still use prior year in 2003 as long as I document all this when their documents are finally compeleted? That will give me the flexibility to change to current year at some point in the future if I want to but won't obligate me to do for 5 years until then.

Am I on track? or way off base?

[Brian Gallagher]

i think if you use current for 2002, you're stuck with it.

[Kathy]

Thank you Brian. Can you provide me with a cite or reference for your answer?

[Guest At Peace]

It is my understanding that as long as the GUST RAP is still in effect and the client has not adopted the restatement, you still have the flexibility to choose the method. If, after the close of the GUST RAP, a plan switches from prior year to current, must stay current for at least 5 years, or if less, the number of years the plan was in existence.

When the actual GUST restatement is adopted, the employer must state the method of testing for the year that has already started.

ERISA Outline Book 2002, p.11.25, 11.26