KEOGH PLAN DOCUMENT - Where is it?

[Guest Eagle Don]

A business owner has a Keogh plan that is over 30 years old. 1 person plan, it has always been a 1 person plan. The form 5500 has been filed for every year.

They cannot find their plan document, nothing. They have been with the same financial institution for 30+ years and that institution cannot find a document.

I have read through 2008-50.

I have never done a submission for a plan with zero documents. All of my submissions to date have been for plan document failures due to missing amendments.

Any thoughts? $750 fee? $375 fee?

The fees for not voluntarily indentifying the missed amendments are huge, do you think they apply?

Gust - $3,000

UCA/OBRA 93 - $3,500

TRA 86 - $4,000

T/D/R - $4,500

ERISA - $5,000

This is my first time using this message board, please be gentle.

Thank you

[J Simmons]

Was the financial institution the document provider? If so, what does it have to say for itself about the fact it has no record of any plan documents?

[jpod]

Without studying the rev. proc. word for word, I think you should be able to file for VCP with a fee of only $750. Perhaps you can file for VCP on a John Doe basis.

[Jim Chad]

I realize I am moving the discussion in a different direction, but I want to ask this question. How many times has anyone seen all of the document for a Plan that was 20 years old or even 10, (I mean from the employer)?

An employer with a 3 year old plan is looking at switching to us for TPA services. They can't find a copy of the document. It would not surprise me if it turns up in a year or two.

This has not been unusual in the small plan market where the business owner is "wearing 27 different hats."

Let me play the devils advocate for a minute....would any of you fill out an EGTRRA document right now and wait a year to see if the other documents are found?

Assumption 1: $150,000 in the plan

Assumption 2: $2,000,000 in the plan

[K2retire]

We will not take a conversion plan until they produce the prior document and all required amendments. I agree with you that it is rare for a small employer to know where to find them, but usually the prior provider can come up with them.

If you haven't seen the existing document, how can you be sure that you aren't deleting a provision that is a protected benefit?

[Bird]

Let me play the devils advocate for a minute....would any of you fill out an EGTRRA document right now and wait a year to see if the other documents are found?

I often take a more practical approach than some here, but (so far?) I haven't taken over a "plan" without a document. I wouldn't know where to begin to write the plan provisions.

[Guest Sieve]

Eagle Don -- If there are no documents whatsoever--not even, e.g., a GUST restatement--then I would go under EPCRS only as a John Doe. The reason: this may not even be a Plan Document failure (see EPCRS Section 5.01(2)(a)), and therefore you would not want this to be rejected by the IRS because it doesn't fit within VCP--I think that's begging for an audit. You might be interested in reading this thread: http://benefitslink.com/boards/index.php?s...91&hl=audit

K-2 -- You may be giving up some consulting income. If a potential client comes to you with a TRA '86 document which has not been subsequently amended for GUST, then it is ripe for VCP. You could either do it yourself or, if necessary, refer it to an attorney who might send you cases as a "thank you".

Jim -- I'm not a TPA, but without the intial plan document for a plan that has been around since just 2005, I don't think anyone should put together an EGTRRA document in the hope that the GUST document will be "found" in a year or so. But, then, I don't get paid based on assets.

[K2retire]

Larry, there would be some sense in your suggestion for us if we did consulting or VCP filing. Since we don't, we find it easier to motivate the client to look for documents BEFORE we let them in the door.

[J2D2]

Jim,

A big concern of mine in this type of situation is whether the employer's inability to find the document reflects a general lack of interest in fulfiling its duties as a plan sponsor. You may be able to get a feel for this as you go through your due diligence, but this is one of those red flags that makes me nervous. If you go forward, make sure that there is a clear understanding, preferably in writing, of what is involved in the operation and administration of the plan and who is doing what to whom.