Thrift plan not complying with document

[Guest ksumner]

A governmental thrift plan has not been complying with the plan document on two issues for several years.

We will amend the document at this time. However, is there any liabitily for past non-compliance?

Does anyone audit these plans?

[Everett Moreland]

The noncompliance could result in disqualifcation of the plan for failure to follow the written terms of the plan document. The noncompliance should be corrected as described in RP 98-22 and RP 99-31.

[Guest Ralph Amadio]

As Everett Moreland stated, a danger of disqualification exists, however the Service in my experience is more interested in bringing plans back into compliance, (along with the appropriate penalties, of course)

As to audits--Since the 1977 moratorium on governmental plans has been taken off, these plans are being audited. You don't state the type of plan sponsor, but typically the audits are relative to an audit of 403(B) or 457 plans, wherein the auditor reviews all plans, at least here on the West Coast.