Missing Plan Amendments

[Gary]

A plan is terminating and I am to preare the plan amendment to terminate the plan.

The termination amendment contains the plan termination date and includes recent legislation such as PPA, and WRERA.

In reviewing the plan sponsor's document I determined that the following amendments were not included with the plan:

401a31B automatic rollover

PFEA

415 regulations

I can provide the plan sponsor with those prior amendments along with the plan termination amendment.

Any practical suggestions as to what should be done? It's a one participant plan and the plan has operated in accordance with the law, just didn't have the amendments in place (or have been misplaced).

Thanks.

[J Simmons]

Plan document failure, VCP. Rev Proc 2008-50, section 12.03. Interim amendment failure only, $375.

[Gary]

Thanks.

I've never gone through the VCP process.

Approximately how much time in hours worked might this process take for the actuary handling the matter? One hour? 5 hours? Other?

[J Simmons]

For the interim amendment failure only application, probably about 2 hours total time, given that you have already identified each interim amendment for which there is no document.

[Gary]

Thank you.

I was considering delivery to the plan sponsor of the plan termination amendment to the client along with the other amendments that should have previously been adopted.

Then I would inform them that since the amendments were not adopted timely it is a plan qualification failure that could be remedied through VCP. I could provide them the filing fee and service fees and let them decide if they want to proceed with VCP.

Does that make sense?

In general, I know many of the DB plans my firm implemented have never adopted the PFEA amendment, since our firm did not provide the amendment to the plan sponsors.

Should a VCP filing take place for just that one amendment, which never impacted plan operation? Could this be better addressed instead at the time of EGTRRA restatement and determination letter filing when that occurs?

Thanks.

[J Simmons]

That approach with the client whose plan you are currently dealing does make sense to me.

As for the others, are those DB plans prototype plans? If so, you might be able to make a PFEA amendment through EPCRS at the prototype sponsor level--I'm not sure if PFEA required employers to make certain selections or was basically boilerplate, the same applicable to all.

If you do deal with the issue through EGTRRA restatements, when submitting for a d-letter, make sure to flag it and include the VCP application, or else you might face stiffer penalties. And then there's the possible chance of audit exposure in the meantime--which would result in higher penalties to fix as well.

[Gary]

Thanks again.

The plans are all volume submitter plans. That is, pre-approved plans.

The sponsor of the pre-approved plan would have generated a boiler plate amendment that could have been adopted by all adopting employers, just like our current pre-approved plan sponsor (Corbel) does.

[Blinky the 3-eyed Fish]

If you research the deadline for the PFEA amendment, you will realize why it wasn't adopted yet by your DB plans.

[Gary]

My understanding from a recent conversation with someone at Corbel is that the PFEA amendment has been extended with the PPA amendment due date.

I will see if I can find some actual documentation that supports the deadline extension for PFEA amendment. Not yet sure where that extension of deadline was communicated.

Thanks.