plan amendment and resolution?

[Gary]

A plan sponsor is a closely held owner of a business with say 10 employees.

He has a defined benefit plan and a cross tested 401k profit sharing plan that provides a separate rate group for each participant.

When amending the defined benefit plan is a resolution required as well, authorizing the amendment? I don't always no or see th point of a resolution, especially with a closely held business. The plan document does not make mention of a resolution needed in its plan amendment provisions.

Now for the 401k plan.

After the year is over the owner decides on the percentage allocation for each participant. To document this, is an amendment required? A resolution required instead? Or both? It would just state the amounts provided to each employee for the specific plan year.

Thank you.

[Bird]

If it's a corporation, a resolution is needed to authorize corporate action unless someone is otherwise generally authorized to take action. But the IRS just cares if the amendment was adopted; I've never voluntarily provided a resolution nor been asked to provide one. It could probably be argued that a 100% owner of a corp. doesn't need to tell himself it's ok to do something. A sole proprietor needs no separate authorization (from himself) to take action (although we always prepare a "certificate of action" anyway...).

As for the percentage or dollar allocations to groups, you're supposed to have a memorandum from the business to the trustee telling how the contribution is allocated. I don't recall the history of that but it goes way back and the IRS said this somewhere, sometime.