Prototypes

[Guest pjb]

It's my understanding prototype adoption agreements must be restated for every amendment. Separate amendments to a document section are not permitted. Is this true? Is there a rev proc that backs that up?

Thanks

[WDIK]

The wording in a prototype document that we use indicates that amendments or changes of the choices of options in the Adoption Agreement must be in writing, but does not seem to indicate a completely new Adoption Agreement is required.

Also in several audit situations that included amendments to prototype documents, no issue was made of the fact that a simple amendment changing one page of the adoption agreement was used. I am not familiar with a revenue procedure that backs up this approach.

[Lynn Campbell]

I have seen amendments replacing one or more pages of an Adoption Agreement many times and I think this is perfectly OK.

[E as in ERISA]

I don't know what the answer is. But if you think about it, substitution of a page within an adoption agreement still looks like a restatement. You have one document that is all intact. Compare that to adding a separate page onto the end of an adoption agreement.

[g8r]

I've never been comfortable with page replacements (mainly because I just don't understand how it works in operation - e.g., what happens to the original page and how do you deal with the effective date).

However, there is nothing mandating a restatement for every minor amendment. While it may not be on point, look at the tack-on amendments we've already had to do for EGTRRA and 401(a)(9). I know those were mandated by the IRS. But, the point is you won't find anything dictating a restatement -- other than a rule in the determination letter rev. proc. (I think it's 2003-6) that if you have more than 4 amendments you must restate.

[Guest rhp]

Section 5.14 of Rev Proc 2000-20, relating to M&P plans, states that the employer must execute a new signature page if it modifies any prior elections or makes new ones. I read that to allow amendment of specific pages only. The signature page of the PPD document contains language for amending by page. The provision requires that you list the section numbers changed, effective dates and pages involved.

[Guest pjb]

Thank you for your replies. I guess we're saying that one can amend an adoption agreement by either following the procedure in the prototype. If no procedure, at a minimum, print an updated page showing the option that changed, print the effective date section page showing a new effective date, and add a new signature page. A separate amendment written like an amendment to an individually designed plan is not permitted. All amendments need approval by the prototype sponsor (as implied by the rev proc you cited).

Anyone disagree?