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- Revenue Procedure 2002-73 extends the GUST remedial amendment period for M&P, volume submitter, and certain other plans to September 30, 2003. Does this mean that EGTRRA good faith plan amendments?
- Does the filing of a determination letter application within a plan's GUST remedial amendment period extend the deadline for adopting EGTRRA good faith plan amendments?
Revenue Procedure 2002-73 extends the GUST remedial amendment period for M&P, volume submitter, and certain other plans to September 30, 2003. Does this mean that EGTRRA good faith plan amendments?
No. Certain EGTRRA plan amendments may have to be adopted sooner in order to be effective for a plan year without violating section 411(d)(6).
Under Notice 2001-42, 2001-30 I.R.B. 70, a plan is required to adopt EGTRRA good faith amendments by the later of the end of the plan year in which the EGTRRA amendments are effective or the end of the GUST remedial amendment period. The extension of a plan’s GUST remedial amendment period under Rev. Proc. 2002-73 automatically extends the time by which the plan must adopt EGTRRA good faith amendments, including both plan amendments required by EGTRRA and plan amendments permitted, but not required, by EGTRRA. For example, if a plan eligible for the extension under Rev. Proc. 2002-73 implements catch-up contributions for 2002, a good faith amendment permitting catch-up contributions under the plan for 2002 is not required to be adopted before September 30, 2003 (or the end of the 12-month period following approval of the M&P or volume submitter specimen plan, if later).
However, as explained in Notice 2001-42, EGTRRA does not provide relief from the anti-cutback prohibition of section 411(d)(6) for plan amendments adopted as a result of EGTRRA changes in the plan qualification requirements. Therefore, in order to have a provision effective of a plan year, a plan may have to be amended for provisions of EGTRRA before the time when EGTRRA good faith plan amendments would otherwise be required to be adopted. For example, EGTRRA made changes affecting the determination of whether a plan is top-heavy. As a result, a plan that would be top-heavy for 2002 under pre-EGTRRA law may not be top-heavy for 2002 under EGTRRA. In order for the EGTRRA changes to the top-heavy rules to be made effective under such a plan for 2002, a plan amendment reflecting the changes would have to be adopted before the minimum benefit determined under the plan’s pre-EGTRRA terms accrues, i.e., the last day of the 2002 plan year, in the case of a defined contribution plan. The increase in the compensation limit under section 401(a)(17) in a defined contribution plan is an example of another EGTRRA change that might have to be adopted before the time EGTRRA good faith plan amendments would otherwise be required to be adopted.
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Does the filing of a determination letter application within a plan's GUST remedial amendment period extend the deadline for adopting EGTRRA good faith plan amendments?
Yes, to the extent earlier amendment is not required to avoid violating section 411(d)(6). Under section 1.401(b)-1(e)(3) of the regulations, the filing of a determination letter application within a remedial amendment period extends the period until the expiration of 91 days after the determination letter is issued. Thus, the filing of a determination letter application within a plan’s GUST remedial amendment period extends the period for 91 days after the GUST determination letter is issued. Because EGTRRA good faith amendments are generally not required to be adopted earlier than the end of a plan’s GUST remedial amendment period, the filing of a determination letter application within a plan’s GUST remedial amendment period also generally extends the time by which the plan must adopt EGTRRA good faith plan amendments for 91 days after the GUST determination letter is issued. However, the filing of a determination letter application within a plan’s GUST remedial amendment period does not extend the time for adopting an EGTRRA plan amendment past the time by which the amendment would otherwise have to be adopted to avoid violating section 411(d)(6), as described in Question 1 above.
The filing of a determination letter application within a plan’s GUST remedial amendment period also extends the time for adopting amendments required by Notice 2001-37, 2001-25 I.R.B. 1340, regarding the inclusion of qualified transportation fringes in IRC section 415(c)(3) compensation; Rev. Rul. 2001-62, 2001-53 I.R.B. 632, regarding changes to the mortality tables under section 417(e); and Rev. Rul. 2002-27, 2002-20 I.R.B. 925, regarding the incorporation of deemed IRC section 125 compensation in a plan’s IRC section 415(c)(3) definition of compensation.
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