GUST/EGTRRA Amendments for Terminated Plan

[Guest enelson]

Does anyone know whether GUST and/or EGTRRA amendments need to be made for terminated DC plans that still have plan assets due to the inability to locate missing plan participants? The plan has received a termination determination letter; however, it has not been able to distribute all of the plan assets b/c it has been unable to locate some of the plan participants. Thanks for any assistance you may be able to provide.

[mbozek]

why not just pay 100% of the missing participant's account to the IRS as withholding?

[Guest enelson]

We're considering doing that, but in the meantime, we trying to figure out if we need to amend the plan for EGTRRA and/or GUST.

[E as in ERISA]

I would assume that you don't, provided that the "termination date" of the plan (as reported in your application for d-letter on termination) was pre-GUST/pre-EGTRRA effective date.

[KJohnson]

How long has this plan been terminated?

You needed to have your USERRA amendment if it terminated at any time after December1994 and most of the provisions of TRA' 86 and SPJPA were applicable at the beginning of the 1997 Plan Year. I would think that the IRS would have required a GUST update at the time of termination.

I have always thought that you do not have to update your plan for new law after the termination if the plan was "current" at the date of termination (without respect to the remedial amendment period) and if you distribute assets as soon as adminstatively possible. I believe that there is a rebuttable "presumption" that if you have not distributed assets within a year of termination, you have not distributed as soon as administratively possible. (I believe that there is an "extenson" to this presumption if you go in for a determination letter).

If you haven't distributed assets as soon as administratively possible, you will need to update your plan.