GUST Deadline — A Post-September 30th Recap
Rev. 10/09/03, E-mail Alert 2003-19

Rev. Proc. 2003-72 GUST Submission Extension
On September 30, 2003, the deadline for amending master/prototype plans and volume submitter plans for GUST generally expired.

For pre-approved (not custom) plans that were amended for GUST by September 30, IRS Rev. Proc. 2003-72 extends the deadline for filing determination letters to January 31, 2004.

In addition, eligible plans that missed the September 30th GUST amendment deadline can apply for a determination letter and pay a reduced compliance fee of only $250 plus the determination letter fee provided this is filed by January 31, 2004.

Required Minimum Distribution (RMD) Amendment Rev. Proc. 2003-72 Coordinated Extension
Rev. Proc. 2003-72 also extended the time by which a defined contribution plan must be amended to comply with the RMD Final Regulations and the plan amendment rules of Rev. Proc. 2002-29. The new deadline is the later of the first plan year beginning on or after January 1, 2003 or the end of the GUST remedial amendment period. Keep in mind that this does not extend the original December 31, 2003 deadline for Sponsors of pre-approved plans and the requirement of Prototype Sponsors to furnish copies of the amendment to the adopting employers. In addition, the final regulations must be utilized to calculate the 2003 RMDs.

The Income Tax Regulations provide that if a determination letter is filed during the remedial amendment period, the period is extended until the expiration of 91 days after the final determination letter is issued. Therefore, if an eligible plan has submitted for a determination letter on a timely basis, the deadline for adopting the RMD amendment would be extended until the 91st day following the receipt of the final determination letter.

GUST Extension Applies to Other Plan Amendments with GUST Deadline
A number of other plan amendments were required to be made by the GUST deadline and, as such, the deadline for these amendments is also extended to the 91st day after the final determination letter is issued for eligible plans that submit under Rev. Proc. 2003-72: For examples: the EGTRRA "Good Faith" Amendment and the Code Section 125 "Deemed Contribution" Amendment.

Hurricane Isabel Extension
On September 24, 2003, the IRS issued News Release 2003-112 in which tax relief was granted to the victims of Hurricane Isabel. The GUST remedial amendment period for an eligible plan that had a GUST deadline on or after September 18, 2003 is extended to Nov. 18, 2003. Click here for IRS News Release 2003-112. Affected employers who qualify and who file for a determination letter should write "Hurricane Isabel" on the top of the determination letter application.

Individually Designed Plans
Individually designed plans had to have been restated for GUST by February 28, 2002. If an individually designed plan's sponsor signed a Certification under Rev. Proc. 2000-20 to restate onto a prototype document, the adoption should have been completed by September 30, 2003. If, pursuant to Certification, the individually designed plan restated onto a prototype plan by September 30, 2003, it may be submitted by January 31, 2004.


Eligible Plans That Did Not Restate for GUST by September 30, 2003 and That Miss the January 31, 2004 Deadline
As stated above, Rev. Proc. 2003-72 permits eligible plans that missed the September 30, 2003 GUST deadline to restate their plan for GUST by submitting the plan for a determination letter by January 31, 2004 with a $250 compliance fee.

If a plan is not restated for GUST, the plan could be disqualified by the IRS. Such a plan may enter the EPCRS Voluntary Compliance Program (VCP) in which it will be subject to a compliance fee based on the number of participants in the plan. Note: Plans that missed the GUST deadline but who make an EPCRS VCP submission during the first 12 months after the deadline (generally until September 30, 2004) will pay only 50% of the applicable nonamender fee. (EPCRS Rev. Proc. 2003-44, Section 12.02.)

Learn more about these and other issues at our Current Issues with 401(k) Plans eSeminar.

McKay Hochman Co., Inc. is available to help with VCP submissions. Call 973-492-1880.