403B ROLLED TO PROFIT SHARING PLAN

[cpc0506]

A client has approached us to be their TPA.

The client has a 403b Plan and a separate Profit Sharing Plan.

The client never adopted a written plan document by December 31, 2009. The 403b plan just has salary deferral, no employer money.

What do we do about not adopting a written document by 12/31/2009?

The client would like to merge the 403b Plan into the Profit Sharing Plan. Can this be done? Can the 403b assets be transferred to the Profit Sharing Plan? Does the 403b plan have to be terminated?

Looking for some thoughts....

Thanks.

[david rigby]

This plan sponsor should have competent ERISA counsel. First.

[John Feldt ERPA CPC QPA]

I do not see how the 403(b) plan can be merged with the profit sharing plan. Rollovers, yes, but not a merger.

They should adopt a document for their 403(b) plan and submit under VCP as a nonamender - you may want to wait just a while longer for the new EPCRS Rev Proc to come out - rumor is that many 403(b) issues are addressed in the upcoming Rev. Proc.

[TLGeer]

A client has approached us to be their TPA.

The client has a 403b Plan and a separate Profit Sharing Plan.

The client never adopted a written plan document by December 31, 2009. The 403b plan just has salary deferral, no employer money.

What do we do about not adopting a written document by 12/31/2009?

The client would like to merge the 403b Plan into the Profit Sharing Plan. Can this be done? Can the 403b assets be transferred to the Profit Sharing Plan? Does the 403b plan have to be terminated?

Looking for some thoughts....

Thanks.

Has the client considered using the 403(b) as the ongoing plan? There are advantages to doing so, including the various special rules for maximum contributions.

Tom