Board Resolution signature date

[Benefits 101]

An employer started making contributions into the Plan on 8/1/12. However, they just had the board meeting and signed the board resolution to adopt. There have already been contributions made. Anything they can do? Can a board resolution to adopt be made retroactively?

[ETA Consulting LLC]

On what date did they sign the plan document?

[Benefits 101]

On what date did they sign the plan document?

9/17/12, or 47 days after deposits were made

[mbozek]

An employer started making contributions into the Plan on 8/1/12. However, they just had the board meeting and signed the board resolution to adopt. There have already been contributions made. Anything they can do? Can a board resolution to adopt be made retroactively?

What was the effective date for adoption of the plan in the board resolution?

Didnt the plan sponsor have an advisor who would explain that this problem could be avoided if the President/CFO signed document on 8/1/12 subject to subsequent board ratification?

[Benefits 101]

Effective date is 8/1/12. They were told to get it signed ASAP but they slept on it (its a 3 person company).

The President did sign off before 8/1/12... its just the board resolution to adopt that is 47 days late.

[mbozek]

Effective date is 8/1/12. They were told to get it signed ASAP but they slept on it (its a 3 person company).

The President did sign off before 8/1/12... its just the board resolution to adopt that is 47 days late.

Most corp by laws provide that the president/CEO can sign documents that bind the corporation subject to ratification by the board at a later date.

Reg. 1.401k-1(a)(3)(iii) provides that elective contributions can only be made for amounts that become currently available after the later of the date the employer adopts the CODA or the date on which the arrangement first becomes effective. Non elective contributions can be made before the plan is adopted.

The question is when was the plan adopted? If the president had authority to adopt the plan prior to 8/1 subject to approval of the board at a later date (9/17) why werent the plan contributions on 8/1 made after the plan was adopted?

This is a question that the employer's corporate counsel should answer about when the plan was adopted.

[Bird]

It's not uncommon for board resolutions to approve actions taken by an officer after the fact. It's also possible that the board members unanimously agreed to adopt the plan before it was signed, and just didn't sign the resolution or consent agreement until later. It might depend on how the resolution/consent is worded.

It wouldn't be on my worry list. (I think) in a hyper-technical sense, it's nobody else's business (e.g. the IRS) if an officer took action without board approval.