Good faith EGTRRA Amendment - timing

[Guest abrandw]

There has been considerable discussion about the need to adopt a good faith EGTRRA amendment prior to the end of the 2002 plan year in order to adopt the changes relating to the compensation limit, the top heavy rules, and the 415 limits. I have a plan (recently arrived in the office) which contains the required direct rollover rules and which defines "eligible retirement plan" in the pre-EGTRRA manner - does not include 403(b) and 457 plans in the definition. A good faith amendment was not adopted prior to the end of the 2002 year. Notice 2001-42 says that the good faith amendment must be adopted in 2002 "if the plan language, prior to the amendment, is not consistent either with the provisions of EGTRRA or with the operation of the plan in a manner consistent with EGTRRA." In this particular plan, I am not concerned about the other EGTRRA provisions mentioned above; I can live with the old rules. Can I retroactively amend this plan to change the definition of eligible retirement plan?

[Blinky the 3-eyed Fish]

Yes, the timing to adopt the EGTRRA "Good Faith" Amendment has been extended along with the remedial amendment period. So, assuming your plan qualifies for the extended RAP, you have until 1/31/04 to adopt that EGTRRA amendment. But, in operation, the plan should be following the terms of EGTRRA, including allowing rollovers to vehicles as defined in the new definition of eligible retirement plan.

[Guest abrandw]

Forgot to add that the plan in question is an individually designed plan which is not eligible for the extension.

[Blinky the 3-eyed Fish]

See Rev. Proc. 2003-44 Section 4.10. for the correction method.