Allocation Requirements Retro Waiver

[LANDO]

I have an employer that is closing its doors and terminated all of its employees in December 2013. The plan includes a discretionary match provision, but requires employment on the last day of the plan year to share. No formal plan termination resolution/amendment has been executed to date.

Is there any way the plan can waive the last day allocation requirement for the prior plan year and allocate a match to the terminated employees? Would an 11(g) amendment work?

The plan is roughly 100 participants with 2 HCE's.

[LANDO]

I guess the question is, is anyone comfortable with an 11(g) amendment to accomplish this? Thanks for any feedback.

[Bill Presson]

I assume not everyone is terminated, especially the owner. If you 'allocate' a match to the owner alone, you would fail 410(b) and could do an -11(g). But I don't think a failure is even required, so I don't have an issue with an -11(g) amendment.

[LANDO]

Actually, I just asked for confirmation about whether the owners had actually terminated prior to the end of the year or not, as that would certainly make me more comfortable with the 11(g) route. I have seen previous posts here on BenefitsLink that left me less than convinced one way or the other on the need for a failure. Seems like it was still up for debate.

In any case, thanks for your feedback Bill.