Converting New Plans to TPA's Prototype

[Guest]

We are a TPA that has doubled in size during the past two years. We sponsor our own prototype documents. When assuming duties as successor TPA, if the company used a prototype document (most do), we have been restating onto our prototype.

Is this necessary? I understand that technically a prototype/master document becomes an individually drafted plan when the sponsor of the prototype (bank or tpa) is removed. However, when the restatement for GUST begins, for calendar plan years we will be restating back to 1/01/97 on our document. Therefore my question. During this gap period, can we simply continue to use the former TPA/Bank's prototype/master plan?

[Guest Ray Williams]

We do not use prototypes because we find them to confining and not flexible enough for us to properly design plans for our clients. However we do take over a number of plans that already are on prototypes. We tned to not restate plans that are on prototypes such as Lincoln, Manulife, etc. where the prototype sponsor is still actively involved in the plan. However if the sponsor will not be involved, or if we need to amend to add features that are not available under the prototype, we do restate (in our case on an IDP). There is no legal reason to not use prior administrator's prototype, however you cannot be assured that you will receive any and all amendments to the prototype. We have had to clean up some very serious messes where the prototype sponsor either did not notify the Plan Sponsor of amendments to the prototype, or simply went out of the prototype business without amending its prototype to conform.

In summary, we would recommend restating so that you have complete control.