Does a Form 5300 review ever ask about operational compliance?

[Peter Gulia]

I'm interested in learning from BenefitsLink mavens' practical experiences.

In handling a Form 5300 application for the IRS's written determination that an individually-designed retirement plan document states provisions that, in form, state a 401(a)-qualified plan (I'm thinking about the cycle that ends this winter), does an IRS employee ever ask about operational compliance?

[My 2 cents]

May be wrong, but I thought that, in general, operational compliance would not be considered in a determination letter filing, which focuses on the plan document.

[jpod]

It's never happened to me (as a POA), but if they would ever ask I would respond by saying "I don't know." They have no basis for pursuing it any further.

[Peter Gulia]

Thanks for the help.

"I don't know" is a good response if that statement is true. My inquirer, a nonlawyer practitioner, is evaluating whether she should accept an engagement to act as the representative on a Form 5300 application. If she were asked about the employer/administrator's operational compliance, she would not say she doesn't know (if she does know), and she fears that declining to respond to a question might indirectly suggest that a response would reveal non-compliance.

My guess was that a 401(a)-determination procedure looks only at the plan document, not whether the employer/administrator obeys it.

Anyone with a different experience?

[jpod]

Ok, in place of "I don't know," how about "I didn't anticipate this question(these questions) and what's the relevance anyway?"

[My 2 cents]

Ok, in place of "I don't know," how about "I didn't anticipate this question(these questions) and what's the relevance anyway?"

If operating under a POA, how about "I will have to get back to you on that after I have discussed it with my principal."? Nobody ever said that having a POA meant that you had to go solo, or that having a POA meant that you had to answer for any or all of your principal's transgressions, real or imaginary.

[Peter Gulia]

jpod and My 2 cents, thank you for the helpful ideas.