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Plan Amendments for 2006
October 27, 2006
Plan Amendments for the 2006 Plan Year
The following is a summary (to date) of the plan amendments for plan year 2006. Many of these are optional; some are required. Each amendment is noted as to whether it is optional or required. Prototype and Volume Submitter amendments may be at the Sponsor level, the employer level or both.

  1. Roth 401(k): This is a discretionary amendment (required only for plans permitting Roth deferrals), so it must be made by the end of plan year during which Roth deferrals are first contributed. Because of the discretionary nature of this amendment, it is done at the employer level, not the Sponsor. These amendments were provided earlier in 2006.

  2. Automatic Rollover: IRS Notice 2005-95 (issued on December 2, 2005) coordinates previously published guidance regarding amendment deadlines with Rev. Proc. 2005-66. It also provides transitional relief. The deadline for the automatic rollover amendment is the latter of:
    · December 31, 2005, or
    · The tax-filing deadline, including extensions, for the plan year that included March 28, 2005.

This effectively provides an extension for employers who were unable to meet the December 31, 2005 deadline. Remember that for prototype plans, the sponsor could have adopted the changes on behalf of their employer clients. (Models of different possible amendments were sent to in early March 2005.) Both sponsor and employer level amendments were provided.

  3. Final 401(k) and 401(m) Regulations: For 401(k) plans, the changes included in the final regulations are required so plans generally must be amended accordingly by the tax-filing deadline for the employer’s 2006 plan year. The changes are also required for 401(m) plans with matching and/or after-tax contributions, and the same deadline applies. Profit-sharing plans using the safe-harbor rules for hardship distributions should adopt this amendment during the same time period. For plans that terminate prior to the deadline, the amendment must be made before the plan terminates. The prototype amendment was provided in September as a Sponsor level amendment only.

  4. Pension Funding Equity Act Amendment for Defined Benefit Plans: This is a required amendment for defined benefit plans. The deadline was generally the end of plan year beginning on or after January 1, 2006; however, the passage of the PPA extended this to the end of the 2008 plan year. We are in the process of finalizing this amendment for employers terminating their plans. Since this amendment is only for those plans it is being provided as an employer level amendment.

  5. Required Minimum Distributions for Defined Benefit Plans: Although these provisions become effective this year, the remedial amendment period for this amendment is the end of the EGTRRA cycle or January 1, 2013. However, a prototype amendment available shortly, again for terminating plans only. For on-going plans the amendment will be part of the EGTRRA amendment. This amendment is already available for volume submitter plans.

  6. Relative Value Regulations for Defined Benefit Plans: These changes affect the disclosure provided to participant and do not require an actual plan amendment. We plan to update our administrative forms to address this issue. In addition, we await IRS guidance on whether the new language requirements may be disregarded by Money Purchase and Target Benefit Plans.

For information regarding specific amendments and how they may pertain to your qualified plan please contact us at your convenience via e-mail at info@benefitplans.com or by phone: 724-478-2411.


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Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

This page was last reviewed and/or updated on Friday, July 03, 2015 05:21 PM


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