Plan document doesn't address 410(b) test

[eilano]

An employer has a prototype plan document. In order to receive a matching contribution, a participant must be employed on the last day of the plan year. The plan does not pass the 410(B) test for the plan year. The plan document does not address what to do if the plan does not pass the ratio percentage test. Usually, one can bring in terminated participants until you pass the test or run the average benefits test. Is there a problem with doing this if the plan document doesn't have any provisions regarding this?

[Mike Preston]

Yes with the former, no with the latter.

However, if the former is accomplished by way of an -11g amendment, the Yes changes to No.