Amending a Standardized Plan

[austin3515]

PS allocation conditions = none for actives, 500 hours for terms. Am I correct that we can amend the plan for 2012 (calendar year plan) as long as no one has worked 500 hours yet? We're going to change the allocation methods and the allocation conditions.

My argument is that if you have not yet worked 500 hours, there is still a last day rule that applies to you if you terminated. So it is essentially the same as having a last day rule for everyone.

(assume no retirees).

[Jim Chad]

FWIW I agree with you completely.

[austin3515]

It's worth a lot...

[Guest Sieve]

austin -- I think you were trying to say this at the end of your OP, but I'd analyze it by realigning your allcoation conditions, and would say that what you really have here is an end-of-year OR 500 h/s allocation requirement. If neither of those conditions has passed for anyone, then no one has yet accrued the right to an allocation, so you can change the allocation formula, etc. as you suggest.

[John Feldt ERPA CPC QPA]

A standardized plan:

No allocation conditions for those employed at the end of the year.

500 hours are required only for those that quit during the year.

Suppose the plan allocates using an integrated formula now.

1. If Bob has 125 hours now and he is still employed at the end of the year, can an amendment be done today to change the allocation to be "each person in their own class?"

2. If Bob has 501 hours now (say it's March 31) and he is still employed at the end of the year, can an amendment done on March 31 to change the allocation to be "each person in their own class?"

Is this the question?

[austin3515]

Yes, and the answers are 1) Yes and 2) No.

Although scenario 1 is a little funny because you indicated he has 125 hours today, and we want to amend today, but he is employed at the end of the year. How do you know today that he is employed on 12/31/2012?

[Guest Sieve]

I agree, austin. As of today, he has not accrued the right to an allocation formula, because he does not have 500 hours and it is not yet end-of-year. If either of those has occurred, no changes permitted. If all you have is the end-of-year requirement, you can amend on the day before the last day of the year and make a change--very common use of end-of-year provision. So, no cutback.