Conditional Adoption of Plan

[Randy Watson]

This is kind of an odd question and my gut tells me that it cannot be done.

Can a plan be conditionally adopted? For example, suppose an employer adopts a plan on 7/1 on the condition that a certain event takes place on 9/1? If the event takes place on 9/1, the plan's initial effective date would be 7/1. Would this be any different than contributions being conditioned on their deductibility? References to any guidance would be appreciated.

[jquazza]

It appears this condition would violate one of the conditions required for qualification, the nonalienability of benefits, hence, your plan would not be qualified.

What's the purpose for the 7/1 effective anyway? If it is for anything else but deferrals, you have up to the last day of the plan year to execute your document, so you can wait until 6/30/05 and establish a plan effective 7/1/04. For 401(k) deferrals, you need to have your plan established before you can withhold them.