PPA amendment for frozen one-person PSP

[Guest Penelope]

A client has a profit sharing plan to which no new contributions have been made for several years. One account remains in the plan, for a retired employee who has been receiving annual RMDs. (She is 78). What, if any, PPA amendments are needed for this plan by 12/31/09?

I know the client should terminate the plan, and they will do that next year.

[mming]

I don't believe there is any relief for a plan with no active participants. Even if the plan was terminated and paid out by 12/31/09, an amendment accounting for PPA would still be needed before distributions occur. Just make sure the plan is terminated and paid out by 4/30/10 or I think it would need a full-blown EGTRRA restatement, if one hasn't been done yet.

[Guest Penelope]

I don't believe there is any relief for a plan with no active participants. Even if the plan was terminated and paid out by 12/31/09, an amendment accounting for PPA would still be needed before distributions occur. Just make sure the plan is terminated and paid out by 4/30/10 or I think it would need a full-blown EGTRRA restatement, if one hasn't been done yet.

We have done an EGTRRA restatement. I don't think the plan is free from PPA requirements just because it has no active participants. What I'm wondering is, what particular PPA requirements, if any, would apply to a frozen profit sharing plan whose only participant is in pay status?

[Bird]

Too many to try to pick and choose which ones specifically apply to that plan; we're spitting out a 10 page PPA addendum with our EGTRRA restatements. Your document vendor should have a template for this, no? If it's a prototype it's likely the sponsor has amended the basic plan document already.