Restating to a Standardized Regional Prototype

[Guest Thornton]

If a plan sponsor using a nonstandardized regional prototype restates on to a standardized regional prototype (current restatement date), is it necessary to file for an approval letter? Will this be sufficient for the GUST amendments in 2000 (current prototype not updated for GUST yet) when the final prototypes are available due to the retroactivity involved?

[Guest pensiondoc]

We have been amending our non-standardized prototypes to standardized for quite some time now for several reasons, first and foremost because the client does not want tp pay for something that used to be free.

I believe there is some language in the aproval letter that you can not rely on the approval under sprecifically 401(a)(4)-- a biggie, this is where they want to make the money and this one has the highest user fee of them all.

If you've done your testing and you're ok, or if 401(a)(4) is not a problem for the employer, ie a small employer, I would not worry about amending from non-standardized to standardized.

I am sure some would disagree, though.

[richard]

I suspect there are some situations where the IRS could still look for a determination letter. Perhaps if the amendment is retroactive, the IRS could want a determination letter (at least on the old plan). I agree that a 401(a)(4) determination letter might be useful.

Apart from all of this, what do you all think about at least notifying the client (in writing) that not filing for an approval letter might not cover all situations (either document or operationally) --- to at least cover yourself.

I've also seen situations where the client (with the help of his/her advisors) attempted to bury past sins using a standardized prototype, and I'm waiting for the IRS to get wise to this.

And, if you give the client something that he wants to get for free (e.g., the standardized prototype) and it later blows up, guess who gets the blame?