Timing of Plan Document Amendment/Restatement

[Christine Roberts]

How are people handling plan document updates for the final and proposed Sec. 125 regulations? Is there any point in amending for compliance with the final regulations (e.g., change in status for group health/accident/long term life insurance), and then restating when the proposed regulations are final? Or restating for everything now and doing a "tune up" amendment if needed after proposed regs are finalized? How about operating the plan in accordance with final and proposed regulations, before plan is amended/restated (then making amendment/restatement retroactively effective as of date procedures changed). Finally, what are the prototype document providers out ther doing??

[Guest Paul]

I talked with Harry Becker at the IRS on Friday (10-13-00) and he said they hoped to have the proposed regulations finalized by year's end. He said you did not have to amend the plan document prior to the regulations being finalized so long as you administer the plan in accordance with the new rules. This, it seems to me, still requires you to at least contact all the participants to tell them about the new rules and then contact them again if the rules change later.

[Guest kurt johansen]

Paul, your message was a little unclear. Did Harry say to amend for the final regs by Dec. 31 but that you can wait on amending for the proposed regs until they are finalized or did he say you could wait until the proposed regs are finalized before amending for either the final or proposed regulations. From a practical standpoint, it would be much more convenient to wait to amend until all of the rules are finalized rather than doing a two-tiered amendment approach. Please clarify.

Kurt