Non-Amender, or is it!!!

[Guest StanJacobson]

Company initially adopted a M&P standardized prototype plan which gave authority to amend to Sponsoring Organization. The original effective date of Company's Plan was in 1986.

Sponsoring Organization received a Notification Letter from IRS in 1991 approving its TRA '86 Plan.

Through oversight, Sponsoring Organization failed to notify Company of updated plan.

Recognizing that there may be 401(a)(1) and/or other issues, would you consider this a "non-amender," since the plan was timely amended by the Sponsoring Organization.

Where in the law is it required that the Company AGAIN adopt (i.e, timely sign) the plan, when the right to amend has been deligated to the Sponsoring Organization.

Rev. Proc. 95-12 talks about the employer "adopting" the plan, but does not (I think) define "adopt" for this purpose.

In essence, I am saying that if (a) the sponsoring Organization timely amends the plan; and, (B) the Plan Sponsor (i.e., Adopting Employer) "deligates (has previously deligated) to the Sponsoring Organization the right and power to elect any amendment to the Document without the prior consent of Company" that there is no such thing as a "Non-Amender" in this instance.

Do you agree with my position? All comments appreciated.

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[Guest nbates]

Presumably, the orginal adoption agreement and/or plan document contained a provision which permitted the adopting employer to delegate the amendment responsibilities to the sponsor. I'm not sure that a board resolution would suffice in this instance. It's my understanding that the IRS has historically taken the position that (unless the M/P standarized prototype had a provision as I have described above) the plan that ultimately received an opinion letter in 1991 is a different plan than what was adopted previously by the adopting employer, in which case, a "readoption" if you will, would be required. You may want to take a quick look at Rev. Proc. 89-9 to see if there is any reference to the "readoption" procedure. I hope this is helpful.