unsigned plan document or amendments

[k man]

the initial and only plan document was never executed. what is the proper correction method. one of the trustees is now deceased.

[Guest FLMaster]

This may be a state law issue. (Though ERISA overrides state law there is no uniform execution of trust act that I am aware of) Some states allow oral trust and contemporaneous writings to validate a trust. I don't think this can be answered unless you check state law on trust execution. Hill York v. Commissioner may be of some help. In the interum have the existing sponsor sign the document.-Then go to the beach!

[FormsRstillmylife]

Your ERISA attorney may recommend that you file with the IRS voluntary compliance program like a non-amender. The IRS has been known to accept the history of plan administration as evidence of the intent to maintain a qualified plan and permit a current plan signature (with payment of compliance fee).

[E as in ERISA]

Is the sponsor a corporation? A corporation can't really sign. It takes action through the Board of Directors. So if you have a timely corporate resolution authorizing the adoption of the plan, the IRS may accept that as a timely "signature." I have even seen the IRS suggest that solution for plan amendments. But there should be evidence that the board was looking at the document when it adopted that resolution. Not just authority to adopt a plan in a generic sense. The fact that there was no follow through of having a person actually sign the document doesn't have to hurt you.

[Guest FLMaster]

I concur with E-ERISA- see if a corporate resolution is on file or other evidence substantiating a trust.

[k man]

I concur with E-ERISA- see if a corporate resolution is on file or other evidence substantiating a trust.

no corporate resolution on file. i had thought about that myself. in this situation believe it or not the corp is out of business but i need to clean other things up with the plan so it seems it would be best to go into vcp with it.

[Guest FLMaster]

Ouch-any evidence at all a plan is in existence?

[k man]

Ouch-any evidence at all a plan is in existence?

there are brokerage statements and three years of 5500s were filed.

[namealreadyinuse]

I would guess that you are not technically eligible for VCP because you don't even have a plan - it is not just a non-amender.

The worst case correction is to treat plan as nonqualified. Tax participants in all prior years on vested percentage, amend corporate tax returns to remove deduction for unvested contributions, and file trust tax returns for all prior years to pay tax on earnings (or add earnings to corporate tax return if no legal trust established). Anything better than that is gravy, so give it a try by going anonymous VCP. It is not that much more difficult than a formal VCP and is the only way to go in my mind, but again, you are probably not even technically eligible to do this if you don't have a plan.

[Guest FLMaster]

I would NOT concede you do not have a plan. I have been to court too many times where a Judge would rule that a contract existed even though the documents went UNSIGNED. I have seen judges rule a trust exist even though UNSIGNED. You may DEFACTO have a plan. This could occur even if the document is unsigned or originals weere lost. You may want an exparte proceeding before a judge in state court to show a plan exist rather then go to the service. Trust instruments are normally decided by state law.

[Guest mjb]

While IRS reg 1.401-1(a)(2) requires that a Q plan be a written program there is no requirement under the regs that the document must be signed in order to be effective. After ERISA was enacted the IRS attempted to require that corporate Q plans be adopted by board approval (see reg. 1.410(a)-2©(1)(i)) then required that plans be signed and now allows plans to be adopted by a signature or board resolution. The instructions for line 3a of the 5300 form allows a plan to be submitted in proposed form instead of being signed. The only reason for a signature is to certify that the plan became effective which can be demonstrated in alternative ways. Reg. 1.401(b)-1(a) notes that IRC 401(b) does not permit a plan to be made retroactively effective for qualfication purposes for a taxable year prior to the taxable year in which the plan was adopted by the employer (without defining how a plan is adopted).

Q1 is this an indvidually designed plan or a prototype plan that has an an adoption agreement which is separately signed?

Q2 is there a separate trust which was signed by the fiduciary?

Q3 Has the IRS issued a determination letter?

Q4Was the plan required to be adopted within 90 days after the det. letter was issued?

Q4 was determination letter based on submission in proposed form?

[Guest FLMaster]

Good work MJB! Now you can go to the beach

[k man]

While IRS reg 1.401-1(a)(2) requires that a Q plan be a written program there is no requirement under the regs that the document must be signed in order to be effective. After ERISA was enacted the IRS attempted to require that corporate Q plans be adopted by board approval (see reg. 1.410(a)-2©(1)(i)) then required that plans be signed and now allows plans to be adopted by a signature or board resolution. The instructions for line 3a of the 5300 form allows a plan to be submitted in proposed form instead of being signed. The only reason for a signature is to certify that the plan became effective which can be demonstrated in alternative ways. Reg. 1.401(b)-1(a) notes that IRC 401(b) does not permit a plan to be made retroactively effective for qualfication purposes for a taxable year prior to the taxable year in which the plan was adopted by the employer (without defining how a plan is adopted).

Q1 is this an indvidually designed plan or a prototype plan that has an an adoption agreement which is separately signed?

Q2 is there a separate trust which was signed by the fiduciary?

Q3 Has the IRS issued a determination letter?

Q4Was the plan required to be adopted within 90 days after the det. letter was issued?

Q4 was determination letter based on submission in proposed form?

Prototype.

no

no

i dont know

n/a

concerning the state court suggestion that might not be a wise move fiscally as the VCP fee is only 750.

what are some of the ways to establish a plan absent a signature? we dont have a corporate resolution either.