Failure to Adopt Automatic Rollover Good Faith Amendment by Deadline

[Guest CMSP]

I have a client who failed to timely adopt a good faith amendment reflecting the automatic rollover requirements by the end of their first plan year ending on or after March 28, 2005. According to IRS Notice 2005-5, Q&A-16, the timely adoption of a good faith amendment allows an employer to retroactively correct any disqualifying plan provisions within the plan's EGTRRA remedial amendment period. However, what is the plan's remedial amendment period if it failed to adopt this good faith amendment? Is it the general remedial amendment period contained in IRC section 401(b)? If not, what is it? It does not seem that it should be the end of the initial EGTRRA remedial amendment period (before extensions) since IRC 401(a)(31)(B) did not spring into affect until regulations were adopted by the DOL.

I'm wondering the answer to these questions for two reasons: (1) If the remedial amendment period is the general rule in IRC section 401(b), do I still have time to timely adopt an amendment to reflect the automatic rollover requirements since my client has not filed their tax return yet; or alternatively, (2) am I eligible for the VCP fee for nonamenders in Rev. Proc. 2003-44, which provides for a 50% reduction in the VCP fee if a plan is submitted within the one-year period following the expiration of the plan's remedial amendment period to comply with tax law changes.

Any thoughts would be greatly appreciated!