Failure to make profit sharing contribution/amend for GUST and other issues

[Guest erisa15]

401(k) Plan established in 2001 with a discretionary profit sharing component. The Board of Directors voted to make a profit sharing contribution for 2001. No employees made 401(k) contributions in 2001. When the plan was amended and restated for GUST the TPA used a plan effective date of January 1, 2002 (they say because there were no contributions for 2001). (the search for a new TPA will be done soon)

Problems with CFO, CFO leaves in late 2003 and new CFO in early 2004 finds that the 2001 contribution was not made, the plan amendment was never signed (no Board votes authorizing the amendment and restatement) and there was no 2001 5500 because the TPA says there was no plan in 2001 although we do have a signed document.....( we will use DFVC to address the 5500 issues)

Company wants to make the missed contributions plus earnings. Any thoughts on using EPCRS to get the IRS to bless the profit sharing contribution issue since we have to go in to address the failure to timely amend.

Plan is a standardized prototype. Company is a small 501© that wants to do the right thing. Thank you in advance for comments.

[mbozek]

There is no date for making contributions to a PS plan under ERISA or the IRC. In a NP there is no deadline for deductions to worry about. The only issue is what year the contributions will be attributed to for 415 purposes. Contributions made in a limitation year are counted for 415 purposes in that year. Dont know why you want to raise this issue with the IRS. Just make the contributions in 04 and move on.

I also have question as to why the client should be put through the cost and trouble of EPCRS for a plan that had no assets in 2001. Worst case scenario is that the plan not qualified for 01 but since there are no assets and no contributions due there is no tax consequences to the employees or employer. If the plan was properly amended for GUST as of 1/1/02 then it will be qualified going forward for all contributions from 2002. There is also a question of whether the plan even existed for 2001 if no contribution was made in 2001 since Rev. Rul 81-114 requires that a contribution be made by the date for filing the tax return for 01 in order for the plan to be qualified.

[Guest erisa15]

Thanks for your response. Unfortunatley the amended and restated plan was never signed and there are no board actions regarding the GUST restatement, so we still have the failurr to timely amend issue but that is easier to address.