Restatements still not done

[Rai401k]

We use the pre-approved corbel documents, and we are coming close to the end of the year, unfortunetly it’s going to be close to impossible for us to get all of our restatements done and signed by 12/31/2009.

If we start using an effective date of 1/1/2010 we know that we have only until 4/30/2010 to have those documents signed unlike having till the end of the year for our 1/1/2009 documents, but what other disadvantages would there be for not having all our restatements done by the end of this year?

Is it true that we still have to have the PPA amendment signed by 12/31/2009, we are currently sending them out with our restatements?

[Guest Sieve]

If you have any voluntary changes you want to institute in pye 12/31/2009 along with the EGTRRA restatement, you won't be able to do that if you sign after 12/31/2009 with an effective date of 1/1/2010. Other than that, I can think of no disadvantage to completing the EGTRRA restatements in 2010--other than the separate mailing you will have to do for the PPA 12/31/2009 deadline.

[K2retire]

Corbel advises that the effective date should be the later of 1/1/2002 or the original effective date of the plan. As such, I am cunfused about your reference to using either 1/1/2009 or 1/1/2010 as the effective date on your Corbel restatements.

[Guest Sieve]

K2 --

Corbel is designed so that the appropriate effective dates of EGTRRA changed provisions are indicated in the document, so you are to use a current effective date--that's how Corbel always has done it. Here's what Corbel says: "This [EGTRRA restatement] plan is designed so that the restatement effective date may be a current date. For example, if a calendar year plan is being restated in 2008, then the effective date of the restatement may be January 1, 2008. Using a current effective date avoids the need to reflect changes that have been made to the plan since the last time it was restated (other than changes required by law)."

As indicated in the last sentence of the above quote, if you make the effective date of the restatement 1/1/2002, for example, then what do you do about changes you made to the plan by amendment effective 1/1/2004, or 1/1/2006 (like adding hardship distributions, or loans)? So, you make it effective currently (2009 or 2010), and the doucment takes care of the rest. Otherwise, be careful.

Not all prototype/VS documents are handled in a similar fashion, however.

[K2retire]

Larry,

What you describe is exactly what we were expecting, but we were told we must use 1-1-2002 for the effective date in the Corbel prototype. We had lengthy discussion with their legal team who insisted that was right and that language is included to cover changes that happened between 1-1-2002 and the execution date of the restatement. We have now written over 6,000 documents that way, and I still disagree with their analysis!

[Rai401k]

k2retire,

I believe you are using the Corbel PPD prototype documents, in that case you are correct. We use the Volume Submitter IDP document in which the 2002 dates are hard coded in according to Corbel. We have had this discussion with them because i noticed it in a document I received for a conversion from another TPA. I notice that they used 2002 as the effective date for the EGTRRA restatement. When I called Corbel they let me know that this was unique to thier PPD protype documetns only.

[Guest Sieve]

K2 --

Strange. That advise is contrary to what Corbel's "Adoption Agreement Guide" says (which is the language I quoted, above).

But there may be an explanation . . . With 6,000 plans, I assume that your Corbel prototype was tweaked by your legal department before it was submitted to the IRS in your (company's) name, so perhaps your prototype is somewhat different from the vanilla Corbel prototype that most other organziations use. That may make a retroactive effective date proper in your case, with your plan document. Is that a possibility?

I didn't know about the PPD document effective date. That's an even better (?) explanation.

[K2retire]

It is the PPD prototype.

[Guest Sieve]

A bank restatement I reveiwed for a client a few weeks ago had an effective date of 5/1/2002 (5/1-4/30 plan year). I asked the Bank why, and they pointed to language they had added to the "Special Effective Date" line of an Addendum to the Plan which states:

"Although the Plan's restated Effective Date is the first day of the Plan Year beginning in 2002, or, if later, the original Effective Date of the Plan, this Adoption Agreement reflects Plan elections that are in effect on the date the EGTRRA restatement of this Plan is adopted. As to elections that may have been in effect before the EGTRRA restatement of this Plan is adopted . . . see the Plan as in effect prior to its restatment."

First one I've ever seen like that. Must be a PPD document, I guess.

[K2retire]

Ours has similar laugauge.

Does anyone else think it's odd that they would have drafted that one document so much differently than their others regarding the effetive date, which would seem to be something that would be a standard answer regardless of plan type?

[Rai401k]

So we're almost there, but I still have a lot of restatement left ...about 100 more. Just curious to see where everyone else is at? Am I the only one still working on these crazy restatements!! Can't wait till this is over!!!

[WDIK]

No stress here. It's not April yet.

[Guest Sieve]

One of my clienets (a TPA) has about 325 plans, adn they started about a year or so ago. Only about 3 or 4 stkill remain to be restated (because the person who does them is anal).

As for my own clients, I'm in tune with WDIK's approach.

[K2retire]

Out of about 8000, we've got about 80% done, 10% written but the client hasn't signed them yet, and another 10% to be written.

[Rai401k]

thanks for the feedback guys.... I felt like l was the only one still working on them...alot of people i've spoken to had them done in mid 2009. So I felt like I was so behind.

we are a fairly small TPA ....it's my responsibilty to get all the restatemetns done. I had about 225 to do .... doesn't seem like alot compared to 8,000 but it has taken me since May of last year to get 125 ...... 100 more to go. Hopefully I can get them done by April

[Guest Sieve]

8,000!!?? I can't conceive of having to restate that many. How big is the "restatement" staff?

[K2retire]

We're very much an assembly line shop -- the clients were not offered any options. No staff was added. Our 23 people handled this in addition to our usual work load. (The number of plans terminating due to the recession helped with that.)

[k man]

So we're almost there, but I still have a lot of restatement left ...about 100 more. Just curious to see where everyone else is at? Am I the only one still working on these crazy restatements!! Can't wait till this is over!!!

I have alot more to do and i am working like crazy. if i had until the end of june i would feel alot better.

[Tinman]

Out of approx. 2600 plans, we have less than 200 left. We did make plan design suggestions on the majority of plans, so most of the ones that are left are ones that just haven't responded. All in all, I'm feeling pretty good about where we're at!

[k man]

Out of approx. 2600 plans, we have less than 200 left. We did make plan design suggestions on the majority of plans, so most of the ones that are left are ones that just haven't responded. All in all, I'm feeling pretty good about where we're at!

i have about 120 left. if you are submitting they must be submitted by april 30. that makes the time left a lot shorter. i wish they would give a 2 month extension.

[Guest Sieve]

Remember the last GUST extension?: (i) you have to submit for an FDL if you restate during the extended X month period, and (ii) you incur a separate and additional fee (I think it was $350) when you submit. I suspect that's not the kind of extension people are looking for.

Since this is now part of the 6-year cycle procedure, I personally do not believe there will be an extension. (But, I hope I'm wrong!)

We should have an over/under "poll" for (i) date of issuance of extension, and (ii) length of the extension. Winner is ERISA King/Queen (take your pick) for the day, and gets a toaster.

edited to correct a typo

[GMK]

and gets a toaster.

You mean like someone who says, "Here's to a great Plan. May you provide benefits happily ever after." (or should I restate that?)

[Guest Sieve]

Not what I'd been thinking of, but probably more appropriate . . .

[XTitan]

A toaster is better than being toasted, which is usually the case when these things come up.

[k man]

A toaster is better than being toasted, which is usually the case when these things come up.

i will tell anyone who will listen - I NEED MORE TIME!!

[K2retire]

Has anyone seen any indication of what the fees might be for a correction if the restatement is not completed by April 30? We're looking for a hefty amount to quote to motivate clients who are still dragging their feet.

[k man]

Has anyone seen any indication of what the fees might be for a correction if the restatement is not completed by April 30? We're looking for a hefty amount to quote to motivate clients who are still dragging their feet.

i am down to about 60 plans. what a big job this has been.

[SheilaD]

Has anyone seen any indication of what the fees might be for a correction if the restatement is not completed by April 30? We're looking for a hefty amount to quote to motivate clients who are still dragging their feet.

Without giving specific $ amounts we have been working with a rising fee schedule since this started. Back in 2008 it was X dollars for 6 months, then went up to X+Y (but we'll discount you back if you respond today); then 2X. etc. We are now at 2.5X and anyone who is late and has to go through the VCP program will be an additional X plus IRS fees. This seems to have worked well with motivating our clients.

At this point 90% have responded and we have to assume that a certain amount of the non-responders are actually "lost". 70% of the restatements are complete.

I've learned a lot about this process that we can apply when the DB window opens and hope to be more efficient.

[K2retire]

We have also been increasing our fees as we went along. What I was asking about is the IRS fees associated with filing to correct if they DON'T get the restated document in place by April 30.

[Rai401k]

We made it! All done!

But of course with a week left we are still waiting for people to send us back the documents!

AND we still are in the process of submitting our pre-approved documents to the IRS for determination letter, I know that some people think this is a waste of time but that's the way we do it here!

Only 80 more documents to submit in 5 days!! I'm sure this is exactly what the IRS didn't want us to do, truck loads of documents coming in the last week of April ...sorry