For plans that have already been updated for GUST, various short amendments described below may be needed, depending on the particular plan.
- EGTRRA good faith amendment. Pursuant to IRS requirements, this must be structured as a separate amendment from the updated GUST document. The EGTRRA good faith amendment must be adopted no later than the end of the GUST remedial amendment period.
- Qualified transportation fringe benefits. The Community Renewal Tax Relief Act of 2000 (“CRA”) modified the definition of compensation to include qualified transportation fringes under IRC §132(f)(4) for certain purposes (such as IRC §415). The IRS provided a model amendment in Notice 2001-37.
- EGTRRA technical corrections. The Job Creation and Worker Assistance Act of 2002 made technical corrections to EGTRRA. One such technical correction is the ability to exclude rollovers in determining whether the $5,000 threshold for automatic cash-outs has been exceeded for plans subject to the qualified joint and survivor annuity rules (as originally enacted under EGTRRA, this provision only applied to plans that were not subject to the qualified joint and survivor annuity rules). The IRS has not provided guidance regarding plan amendments in regards to the technical corrections. Thus, at the current time, it appears that an amendment in consideration of these changes is not required.
- Mortality table for defined benefit plans. Rev. Rul. 2001-62 contains a model amendment for defined benefit plans to reflect the mortality table that must be used to adjust the value of certain forms of benefits. This amendment must be adopted by the end of the GUST remedial amendment period (Rev. Proc. 2002-73).
- Deemed 125 compensation.Rev. Rul. 2002-27 contains a model amendment to include “deemed 125 compensation” in the definition of compensation. This amendment is very limited in its application. It only applies when an employer sponsors a cafeteria plan in which an employee can elect cash in lieu of health coverage only if proof of other coverage is furnished. This amendment must be adopted by the end of the GUST remedial amendment period (Rev. Proc. 2002-73).
- Final 2002 401(a)(9) regulations. Revenue Procedure 2002-29 provides a model amendment to be used to update defined contribution plans for the 2002 Final and Temporary IRC §401(a)(9) regulations. The amendment is not required to be adopted until the last day of the first plan year beginning on or after January 1, 2003 (e.g., December 31, 2003 for a calendar year plan). Rev. Proc. 2003-10 postpones the time by which defined benefit plans must be amended to comply with the 2002 Final and Temporary Regulations until the end of the EGTRRA remedial amendment period (generally, not sooner than the last day of the 2005 plan year).
- Deemed IRAs. Rev. Proc. 2003-13 provides a partial model amendment that can be used to update a plan to permit traditional or ROTH IRA contributions. The general rule is that if a plan sponsor wants to permit deemed IRA contributions to its retirement plan, then the plan must be amended to permit the contributions prior to the time such contributions are accepted. However, for plan years that begin prior to January 1, 2004 (i.e., the 2003 plan year), a plan sponsor is allowed to operationally accept deemed IRA contributions provided the plan is amended before the end of the plan year.