Date amendment must be signed on conversion of Money Purchase Plan to PS plan

[Belgarath]

Brain cramp! Assume calendar year MP plan. Client wants to convert to a PS plan mid-year. Let's say July 1. 204(h) notice is done timely. Mus the AMENDMENT be signed by July 1, or can it be signed by December 31, as long as the 204(h) notice was provided timely?

[Bird]

I don't see how you can have a MP plan in place with a required contribution and make the amendment retroactive, regardless of the notice.  

[CuseFan]

Yes, the amendment must be adopted prior to the effective date to avoid an impermissible cutback. Issuing a 204(h) notice does not relieve of that requirement. I believe the 204(h) rules say amendment reducing the rate of future accruals becomes effective as of the latest of: (1) the effective date (as shown in amendment), (2) the adoption date, or (3) the date that is 45 days after the 204(h) notice is provided (15 days for small plans).

[Belgarath]

Thanks - I don't suppose there's any dispensation if it is a multiemployer money purchase plan where the formula is dictated by the collective bargaining agreement, and the collective bargaining agreement is modified as of July 1? I don't see that it helps any...

[CuseFan]

Not unless the form of the plan and contribution allocation formula are specifically referenced to the CBA and thereby automatically change in unison therewith.