Funding a Profit Sharing Plan

[Guest Kala]

Under Treas Reg 1.401-1(b)(2) a Profit Sharing plan must have recurring and substantial contributions made to it out of profits for the employees. We have a Profit Sharing Plan that the employer has not contributed to since we took it over in 1997. They need to restate their document for GUST/EGTRRA. At what point would this plan be considered "abandoned" under the above mentioned treas reg? Because it has not been funded for 6 years is it already considered disqualified? What guideline should be used? What if the employer does plan on funding the plan for 2003 and/or future years?

If somebody could point me in the right direction, I would really appreciate it?

[Blinky the 3-eyed Fish]

The guideline is there is no guideline from what I know. In restating this document, I would ask why the plan remains in existence. Many times it is to retain the availability to invest in certain vehicles that many IRA's will not allow. You may want to restate it into a 0% money purchase plan to avoid the substantial and recurring issue.