timing of switching testing methods

[Tom Poje]

one of the Q and As (#8) was as follows

Q. Based on Rev Proc 2005-66, is it the Service's position that an amendment to change a plan's testing method or HCE definition for a particular year must be adopted by the last day of the plan year?

A. Yes. Under section 5.05(3) this would constitute a discretionary amendment and must be adopted no later than the end of the plan year for which the switch is effective, and perhaps earlier to avoid 411(d)(6) cut back in accrued benefits. Particularly, HCE modifications must be carefully analyzed for 411(d)(6) anti-cutback issues.

opinions expressed by agents as such Q and A's do not necessarily reflect official position, but of course, they seem to be very good guidance. In other words, this seems to answer the question that has been debated for the last few years - or at least answer the IRS leanings.

[R. Butler]

I asked a similar question at an ALI-ABA video seminar last week. My question only pertained to switching testing methods. Pretty much got the same answer. Initially Danial Hogans, an attorney with the Dept. of Treas., seemed to indicate that adopting after the end of the year would be O.K., but he was quickly corrected by Marjorie Hoffman. Ms. Hoffman reasoned that it was a discretionary amendment and under Rev. Proc. 2005-66 would have to be adopted prior to year end.

Now in Mr. Hogans defense I phrased the question more as a 411(d)(6) issue & he really answered it that way. Ms. Hoffman just cut to the chase.

[MWeddell]

Q&A8 for what conference? Recognizing that they do not constitute official guidance, are the Q&A's you are referring to available on the web or in written form?

[Tom Poje]

My apologies. The Q and As are from the ASPPA conference just completed in November.

I know I am not permitted to post the ASAP from ASPPA as they are copyrighted, I don't believe the same rule applies to the Q and As, but I am not sure so that is the reason I only referenced the item.

[R. Butler]

The ASPPA Q&A's are generally posted on the ASPPA website, but 2005 isn't up yet.

At least in regards to Rev. Proc. 2005-66 the provision they seem to be focusing on is Section 5.05(3).