IRC 401(a)(31)(B) Automatic Rollover Amendment

[YankeeFan]

A qualified retirement plan is sponsored by a sole proprietor. The plan solely covers the owner-employee and is therefore not subject to Title I of ERISA. Was the plan required to adopt an amendment for compliance with the automatic rollover provisions under IRC 401(a)(31)(B)?

[Guest Sieve]

That's an IRC requirement, independent of ERISA. So, Yes.

[masteff]

But, correct me if I'm wrong, it's only needed if the plan has a deminimis cashout limit greater than $1000.

Notice 2005-5 might be of some use: http://www.irs.gov/pub/irs-drop/n-05-05.pdf

[Guest Sieve]

You're correct, Masteff, but that would encompass the vast majority of plans prior to the change to Section 401(a)(31)--unless, of course, the plan contained no involutary cash-out provision at all, in which case no amendment would be necessary.