Amendment due date

[rlb64]

Prior recordkeeper incorrectly restated a 401(k) plan as a profit sharing only plan and did not provide for predecessor service. The effective date of the restatement is 1/1/04. The plan year is calendar year. Can we restate and fix retroactive to 1/1/04? Does this fall under the general remedial amendment period rules which allows us correct by tax return due date?

[Alf]

Yes, if it is not a cutback. For example, if adding the service makes others eligible for a pool of profit sharing money, the amendment potentially takes money away from others, so it is prohibited by 411(d)(6) which trumps the 401(b) RAP rule. Also, I am not sure you can correct an operational defect by plan amenmdment even if you are within the RAP, so you should consider whether that applies to you ans research whether you have to file a VCP.

[rlb64]

Assuming there isn't a 411d6 issue, are these amendments operational failures?

[Alf]

I odn't know - were people let in or given vesting and allocation credit during 2004, even though there was no amendment? If so, it is operational and amendment now may not be possible without filing a VCP. If the plan was administered without giving this credit and the decision has now been made to give credit retroactively, then no operational problem.

[rlb64]

Alf, can this plan document be restated again retro to 1/1/04 to continue the 401(k) provision without running into an operational error problem subject to VCP?

Also, can the restated EGTRRA amendment be adopted now as well?

We're trying our best to avoid VCP.

Thanks