Automatic Rollover Amendment and 2005-95

[PMC]

Notice 2005-95 extends the time by which certain amendments need to be

signed depending on whether the amendment is a discretionary one or one due

to correct a disqualifying provision. The Automatic Rollover/ Mandatory

Cash-Out amendment is one needed to correct a disqualifying provision and

the time to sign the amendment has been extended for certain plans.

Question - if the plan had a $5000 cash-out threshold and has decided to

lower that threshold to $1000 via the Automatic Rollover amendment, does the fact

that the cash-out level has been reduced to $1000 constitute a

"discretionary" amendment on behalf of the employer and should have been

signed under the time frame disregarding the extension afforded by 2005-95?

[Blinky the 3-eyed Fish]

It's safe to say that any of the options to comply with 401(a)(31)(B), one of which is to lower the cash out limit to $1,000, meets the requirements of Notice 2005-5 (I think that's the right cite) and is not a discretionary amendment.

[Sully]

Based on the above posts, can someone please confirm the following: A calendar year C-corp employer with a calendar year plan would have until 3/15/06 (plus extensions) to adopt the automatic rollover amendment.

Thank you in advance.

[Archimage]

Yes, that is correct.

[E as in ERISA]

I think that most would interpret it that way. Here is the news flash that indicates that reducing to $1,000 is part of the scheme http://www.irs.gov/pub/irs-tege/epnf_021605.pdf Notice 2005-95 provides the clarification regarding due date for return. I don't think that they are perfectly synchronized so some might debate it. But most would probably consider them close enough.