Amendment Not Executed

[Dougsbpc]

We administer an 80 participant 401(k) Profit Sharing Plan. All assets are pooled except participant loans. The plan has a June 30 year end. In October 2001, the trustee decided to pool all loans. An amendment and corporate resolution changing loans to pooled investments were prepared and sent to be executed. A few days later the trustee (a company employee) was fired. Action was taken but the amendment was not executed.

The company hired a new CFO who subsequently became the new trustee. Even though earmarked loan accounts had already been liquidated and moved to the pooled account, we prepared a new resolution and amendment for him and corporate officers to sign. He acknowledged receipt of the new amendment and assured us it had been executed.

Just prior to completing the June 30, 2002 valuation, we again asked him for a copy of the amendment. He mentioned he would send a copy but never did.

The pooled account had -13% earnings and 9 participants who had loans of course wished they still had earmarked loan accounts. In February 2003 the trustee was fired. Apparently, the trustee misplaced the amendment and resolution which were never executed.

Question: Can a plan be amended by virtue of action taken on an earlier date?

The best solution for this employer (if possible) would be to amend the plan now with a retroactive effective date. The corporate resolution would contain language indicating agreement that the plan was amended by vitue of action taken on an earlier date.

Anyone have any comments on this?

Thanks!