Plan document restatement

[Gary]

I have just taken over plan document duties at my office.

As I understand it, EGTRRA restatement occurred some time ago. Perhaps in 2008?

My understanding is that all volume submitter DC plans must be restated for EGTRRA by 4/30/10?

I also believe all DC plans have to include the PPA amendment by the end of the 2009 plan year?

So if a plan does not restate for EGTRRA do we agree that the plan could be disqualified? Same for PPA?

Thank you.

[movedon]

That's a pretty good summary.

[rcline46]

EGTRRA docs were approved by IRS in 2008, you need to check to see if YOUR plans actually have the EGTRRA restatement done. Possible yes, probable no.

[John Feldt ERPA CPC QPA]

As I understand it, EGTRRA restatement occurred some time ago. Perhaps in 2008?

The EGTRRA Restatement window for pre-approved plans opened April 1, 2008 and closes April 30, 2010. For individually design plans, the restatement window is generally based on the last digit of the sponsor EIN (with several exceptions), with the first window opening February 1, 2006 and closing January 31, 2007 for 1 and 6 (Cycle A). Next was 2 and 7 from February 1, 2007 to January 31, 2008, etc. See IRS Notice 2007-44.

My understanding is that all volume submitter DC plans must be restated for EGTRRA by 4/30/10?

Only of you want to have determination letter reliance. That's sort of like saying, "only if you want to wear clothes to work."

I also believe all DC plans have to include the PPA amendment by the end of the 2009 plan year?

Yes. DB plans also. 457(b) plans may need one too. A few plans have a later deadline.

So if a plan does not restate for EGTRRA do we agree that the plan could be disqualified? Same for PPA?

No and Yes. If a plan is updated for all interim amendments on a timely basis, they do not have to restate. Please keep reading, this needs some explanation. If a plan stays updated for all new laws and regulations on a timely basis by simply piling up one amendment after another, they could remain qualified. But, if the IRS ever audits the plan, they will be allowed to scrutinize everything in the document for defects, even small things like "severance" instead of "separation" (true example). If the plan has a D letter, then the IRS has given the plan a 'stamp of approval' and they generally cannot scrutinize the whole plan document for language defects - instead they can only review amendments that the employer adopted later (those that do not yet have an IRS stamp of approval). In addition, if the plan ever has an operational error, certain fixes under EPCRS are only allowed if the plan has D letter reliance, see Rev. Proc. 2008-50.

With the GUST documents, the IRS extended the prototype reliance and volume submitter reliance (normally given only to the Mass Submitter's document) to the adopting employer. Before then, each employer had to submit their plan individually to get their own personal D letter. Those GUST D letters only cover the plan until the end of the EGTRRA restatement period. So if you have a GUST document's D letter now, it will expire if the plan is not timely restated for EGTRRA.

Pre-approved plans (prototypes and volume submitters) which are created by Mass Submitters, like SunGard Corbel, McKay Hochman, Accudraft, Datair, FT Williams, ASCi, many insurance companies, etc. have been submitted to the IRS for their approval (see the link for details). If your document provider has received approval for their documents, then you can use their documents with your clients and that D letter (reliance letter) becomes your clients' letter as well. But your client must execute (sign) such pre-approved plan before the EGTRRA restatement window closes in order to get that reliance.

6_Year_Cycle.pdf