2009 Plan Amendments
Rev. 12/04/09; E-mail Alert 2009-19

Amendment Mania
All qualified plans must be amended by the end of the 2009 plan year for the Pension Protection Act of 2006 (PPA).  Preapproved defined contribution plans are also faced with an April 30, 2010 deadline to be restated onto an EGTRRA plan document from their current GUST plan document.  As a result of these overlapping required plan changes, some confusion exists within the retirement plan industry on the requirements for the PPA amendment.  The IRS also released guidance late in 2009 regarding the waiver of 2009 RMDs, requiring employers to make decisions on the treatment of 2009 distributions by November 30, 2009.  And last but not least there are several other plan amendments which are not required to be made until future years, yet are being adopted at this time in attempt to consolidate as many requirements as possible to ease the administrative burden of multiple amendments.   This article will highlight the 2009 required amendments and also explain which amendments that are due in future plan years are also being adopted at this time.

EGTRRA Preapproved Defined Contribution PPA Amendment Timing
Current EGTRRA defined contribution preapproved plan documents were drafted based on the 2004 IRS Cumulative List. Since the 2004 Cumulative List was published prior to PPA, the EGTRRA documents do not contain PPA changes and will need to be amended for PPA prior to the end of the 2009 plan year.

GUST Preapproved Defined Contribution PPA Amendment Timing
Plans currently on a GUST document that will not be restated until 2010 will need to ensure their GUST document is amended for PPA prior to the end of the 2009 plan year.  Thus, waiting until 2010 to restate onto an EGTRRA document will require the GUST plan to be updated for PPA prior to the end of the 2009 plan year, then by April 30, 2010 when updating the EGTRRA document a PPA amendment will need to be done for the EGTRRA document so that both documents satisfy the PPA interim amendment requirements.

Can the PPA amendment be executed on a sponsor level?
Our PPA amendment can be done on either a sponsor level or an employer level.  There is a section involving eligible automatic contribution arrangements (EACAs) and qualified automatic contribution arrangements (QACAs) that must be executed by employers who have opted for these automatic contribution arrangements. Therefore plans which include these provisions cannot be amended for PPA simply on a sponsor level.

The current McKay Hochman EGTRRA PPA amendment also contains the following amendments that are due in future plan years:

• The Heroes Earnings Assistance and Relief Tax Act (HEART Act) (due 2010)
• The Emergency Economic Stabilization Act of 2008 (EESA) (due 2010)
• The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA) (due 2011)

Plans must currently be operating in compliance with the provisions in the above Acts as they become effective, but the documents are not required to be updated until a later date.  Click here to view our Charts page for details on each of these Acts.

Code Section 415 Amendment
The plan amendment required for the final 415 regulations (that deals largely with the definition of post severance compensation) should be attached to the EGTRRA document.  Plans may have already been updated for these regulations while on a GUST document, however, this amendment should also be attached to the EGTRRA document.  The 415 final regulations were issued in April 2007 and are effective for limitation years on or after July 1, 2007. Because this was issued after the 2004 cumulative list, it was not able to be incorporated into the EGTRRA document. 

RMD Waiver for 2009
On September 24, 2009, the IRS issued Notice 2009-82 providing guidance, transitional relief, sample plan amendments and answers to questions related to the waiver of 2009 required minimum distributions (RMDs) from defined contribution plans (such as 401(k) plans, 403(b) plans and certain 457(b) plans) and from individual retirement arrangements (IRAs).  November 30, 2009 was established as the deadline to decide the treatment of RMDs for 2009 based on the options provided for in Notice 2009-82.  The document does not need to be amended until the end of the 2011 plan year.

DB Amendments for 2009
A PPA, PFEA, or RASD amendment must be made to the GUST document by the end of 2009. In late October the IRS released over 300 pages of final DB regulations on Sections 430 and 436 relating to funding and limitations on distributions.  The retirement plan industry is currently awaiting guidance on these regulations in order to prepare the required plan amendments. An amendment for terminating plans is on our Portal and news of this has been provided via e-mail. 

Links to other MHCO plan amendment articles and charts...
Restatement and Amendment Deadlines
Amendments for Plans Terminating in 2009
Defined Contribution Plan Amendment Chart: TRA '86—GUST
Defined Contribution Plan Amendments Chart: GUST—PPA