Termination in '06--Complete Restatement Required?

[Guest Gompers]

DC Plan is terminating in '06. Gust prototype with the following "snap on" amendments: 1) EGTRRA, 2) 401(a)(9) post-EGTRRA, 3) cashout/rollover 4) Final (k) and (m) regs. Does this plan need to be entirely restated prior to termination? Does it make a difference whether you plan on submitting a 5310?

[Bob R]

I don't think the IRS would require a restatement. However, filing Form 5310 is the only way to know for sure. If you don't restate, file 5310, and get a favorable letter then you're fine. Otherwise, if you don't file you won't know whether a restatement was required until (if) you get audited years down the road. But, I do feel fairly certain that the the IRS won't require a restatement.

[Bird]

I agree; it should not require a restatement. The final 401(k) reg amendment is the trickiest part right now; I think most document providers have such amendments available, but there's no guarantee that the IRS will accept them. It's probably best to submit on a 5310.

[Guest Gompers]

What made me ask the question is that 2005-66 states that: The termination of a plan ends the plan’s remedial amendment period, and thus, will generally shorten the remedial amendment cycle for the plan.

And, it was my understanding that at the end of this remedial amendment cycle you needed to have an EGTRRA restated document.

But, restating doesn’t work from a practical standpoint because VS practitioners and prototype sponsors won't get their letters for at least another year. If you use the VS or prtotype document that was submitted to the IRS, what happens if the IRS requires some "tweaks?" In that instance you will have restated over to a document that has not been approved and the Plan sponsor might be dissolved by the time that you find out what changes will be required to the VS.

Given this “catch 22” It seems like you should just be able to go with your GUST document with your EGTRAA good faith, 401(a)(9), automatic rollover, and 401(k) and (m) "snap on" amendments and be o.k. but I haven's seen anything that confirms this.