Official Sources requiring accelerated amendment schedule for a terminating plan

[Guest PivotTable]

What official directive directs that a retirement plan must accelerate its amendment schedule when the plan terminates?

[My 2 cents]

For a terminating plan to retain its qualification in the termination process, any statutory compliance requirements effective on or before the effective date of plan termination must be in place. For example, that means that any plan terminating on or after the start of the plan year beginning in 2008 must have in place all of the benefit limitation language required under IRC Section 436. Non-terminating plans may have an extended deadline for making the necessary amendment, but plans that are terminating have to jump ahead and get all of the necessary provisions in place in order to qualify in form as of the date of plan termination. You can't adopt a retroactive compliance amendment after the plan has been terminated and benefits distributed.

[KJohnson]

Rev. Proc. 2010-6

http://www.irs.gov/irb/2010-01_IRB/ar11.html

Termination prior to time for amending for change in law

.06 A plan that terminates after the effective date of a change in law, but prior to the date that amendments are otherwise required, must be amended to comply with the applicable provisions of law from the date on which such provisions become effective with respect to the plan. Because such a terminated plan would no longer be in existence by the required amendment date and therefore could not be amended on that date, such plan must be amended in connection with the plan termination to comply with those provisions of law that become effective with respect to the plan on or before the date of plan termination. (Such amendments include any amendments made after the date of plan termination that were required in order to obtain a favorable determination letter.) In addition, annuity contracts distributed from such terminated plans also must meet all the applicable provisions of any change in law. See also section 8 of Rev. Proc. 2007-44.