DB Document Restatement

[Guest taj32z]

Can someone please clarify this issue for me:

DB plan year end 12/31

If you are using EGTRRA provisions for the 2002 plan year end - did the employer have to adopt a model amendment prior to the end of the 12/31/02 plan year or can they adopt the EGTRRA amendment prior to 09/30/03?

Thank you.

[Blinky the 3-eyed Fish]

For what purpose or to which provisions of the EGTRRA amendment are you referring? It is a multi-faceted array kind of thing.

[David MacLennan]

Probably you are referring to the 415 and 401a17 comp limits that would allow for larger contributions in the funding calculations? Assuming the effective date of the EGTRRA amend provisions is Jan 1 2002 or earlier, the changes cannot be reflected in the funding calcs for 2002 if the amendment was adopted after Mar 15 2003. If adopted between Jan 1 2003 and Mar 15 2003, a 412c8 election must be signed by the Plan Administrator and attached to the Form 5500.

[mbozek]

I thought the 9/30/03 deadline applied to M & P and volume submitter plans. Individually designed plans had to be be amended for EGTRRA provisions that the employer wanted to take advantage of (415 & a17) by end of 02 plan year.

[Guest taj32z]

This plan is on a regional prototype document. If the plan were to use the $200,000 comp. limit for 2002, would they have had to adopted/signed an EGTRRA amendment prior to the end of 2002? Are there any other situations where the employer would have had to adopt/sign the EGTRRA amendment prior to the end of 2002?

(I am very unfamiliar with DB plans - just trying to help get all the document restatements done prior to 09/30.)

Thank you for your help!

[Blinky the 3-eyed Fish]

Okay, we are covering 2 different issues here. One is what David mentions, which is use of the increased EGTRRA limits for funding. If the plan document does not incorporate 415 or 401(a)(17) by reference, then to use these increased limits the plan must be amended. The deadline for considering an amendment for a 2002 calendar year plan would be March 15, 2003, the 412©(8) period.

But, that deadline is passed, and it seems as if you taj just need to focus on getting these amendments done. That being said, all of the amendments as they relate to DB plans have the same deadline, the extended RAP period (assuming your plans meet the requirements for this extension, but that's another issue). DB plans will differ from DC in that there is the Rev. Rul 2001-62 amendment to be done and there is no need to the adopt the new 401(a)(9) reg. amendment.

[Guest dsyrett]

I'm still not clear on this. Doesn't Notice 2001-57 allow for the reflection of the new 415 and 401a17 limits in, for example, a 2002 calendar year valuation if EGTRRA was not adopted until 9/30/03 for a prototype with a remedial amendment period ending on 9/30/03?

From Notice 2001-57:

"The availability of the EGTRRA remedial amendment period is conditioned on the timely adoption of required good faith EGTRRA plan amendments. There are two circumstances in which a good faith EGTRRA plan amendment is required. First, a plan is required to have a good faith EGTRRA plan amendment in effect for a year if the plan is required to implement a provision of EGTRRA for the year and the plan language, prior to the amendment, is not consistent with the provision of EGTRRA. Second, a plan is required to have a good faith EGTRRA plan amendment in effect for a year if the plan sponsor elects to implement a provision of EGTRRA for the year and the plan language, prior to the amendment, is not consistent with the operation of the plan in a manner consistent with EGTRRA. A good faith EGTRRA plan amendment is timely if it is adopted no later than the later of (i) the end of the plan year in which the EGTRRA change in the qualification requirements is required to be, or is optionally, put into effect under the plan or (ii) the end of the GUST remedial amendment period for the plan."

[Blinky the 3-eyed Fish]

The purpose for which you want to "reflect" the 415 and 401(a)(17) limits matters. For a valuation you cannot reflect an amendment to a plan adopted after the 412©(8) period of 2 1/2 months after the plan year. The notice you quote in no way overrides this.

Now if you want to reflect it to, say, increase benefits for participants, then by all means that is available.