PPA 06 amendment for terminating plans

[DMcGovern]

Corbel recently provided an amendment for terminating DC plans that will conform with PPA provisions for 2006, 2007 and 2008, plus the HEART Act.

I don't see that an SMM was provided. Anyone else get one?

[J Simmons]

No, but I am assisting another pension practitioner deal with an IRS reviewer on a Form 5310. Must be a new, trainee at the IRS using the Worksheet, not quite understanding it. First request listed 14 'problems' with the plan documents. Supplied with a copy of the documents submitted with the Form 5310, in a couple of hours time I found the provisions in the last restatement (GUST II) and subsequent amendments for each of the 14 issues. The reviewer accepted 11 and by a second round threw the other 3 back at the practitioner. We expanded the explanations on the 3 for the response--again all were properly addressed in the plan documents submitted--with perhaps one caveat.

The prototype sponsor had adopted a good-faith EGTRRA amendment back in December 2001, using language word-for-word out of IRS Notice 2001-57, section 2.2.1. about changes in the definitions for determination of top-heavy status. As amended by EGTRRA, IRC 416(g)(3) (and the IRS Worksheet for 5310 review) uses the newer term, 'separation from service', but the IRS' Notice 2001-57 in the model language for a good-faith EGTRRA amendment (and such amendment to the prototype at issue) uses the older term 'severance from employment'.

It's nice when the IRS will not even accept its own, suggested model language.

[Guest newbie401k]

The prototype sponsor had adopted a good-faith EGTRRA amendment back in December 2001, using language word-for-word out of IRS Notice 2001-57, section 2.2.1. about changes in the definitions for determination of top-heavy status. As amended by EGTRRA, IRC 416(g)(3) (and the IRS Worksheet for 5310 review) uses the newer term, 'separation from service', but the IRS' Notice 2001-57 in the model language for a good-faith EGTRRA amendment (and such amendment to the prototype at issue) uses the older term 'severance from employment'.

It's nice when the IRS will not even accept its own, suggested model language.

This recently happened to me also, big pain. How did it get resolved?

[J Simmons]

The other practitioner's response was just recently made to the IRS. No reply yet from the IRS reviewer.

[Guest long]

The other practitioner's response was just recently made to the IRS. No reply yet from the IRS reviewer.

I just had the same request made of me re the IRC 416(g)(3) "separation from service" language. The top-heavy provision tracks the language from IRS Notice 2001-57. I plan to just get a board resolution changing the language so it complies with the statutory langugage and we can move on.

[Guest erisafried]

I just had the same deal on the JCWAA technical correction on the top heavy language. It is probably going to be an issue for any prototype dating from mid-2002 or earlier (and maybe some from after that). It doesn't seem like many of the prototype vendors caught this exceedingly minor revision.

When the IRS agent brought it up, my first thought was to tell her to go jump in the lake. Upon reflection, I opted not to wrestle with the pig (you know: the pig likes it, and you just get muddy) and just drafted up an amendment. The agent was so happy when I told her that it was almost worth the trouble. I got the sense that she had gotten yelled at a good bit on this one.