Can a plan document be changed to allow the deferral of a bonus with n

[Guest Sara H]

We have a client who would like to allow their employees to defer their bonus at the end of the year. However, they do not want to match this specific deferral. Am I correct in understanding that this would result in having to have two definitions of compensation, therefore resulting in a nonstandardized plan? My other question is, can I attach an amendment that makes a plan non-standardized and not file a 5307 until a new adoption agreement is done 1 year from now?

[Guest T Hoffman]

The amendment would certainly take the plan out of standardized prototype status, but wouldn't it become an individually designed plan, not a non-standardized prototype? You would have to file a Form 5300, not a 5307.

[Guest Sara H]

Actually, I was told that the non-standardized prototype was going to be changed to allow for two different definitions of compensation. I'm not sure if this is true or not.

[Dave Baker]

Interesting! I suppose one could fill in the blank on the typical non-standardized adoption agreement, where it calls for a description of any "excluded" compensation, and write in something like "provided, for purposes of eligibility for the employer's match, compensation shall not include bonuses."

[Dawn Hafner]

The PPD nonstandardized prototype allows for a different definition of compensation for employer contributions, matching contributions and salary deferral. First there is a general definition, and then the opportunity to name a special definition for matching or salary deferral contributions.

[Guest T Hoffman]

Again, from the first post it sounds like we are talking about amending a standardized document. You can't just create a nonstandardized plan by amending a standardized plan. You have to restate the plan into a completely new nonstandardized doc. Otherwise, you have an individually designed plan and you have to file a 5300.