Can a plan document be amended retroactive to the amendment effective date?
Yes, sometimes. While it is always in best practice to execute plan amendments prior to the amendment effective date, it is possible to change plan provisions retroactively. The general rule in allowing this is that no plan participant (or potential plan participant) loses any form of plan benefit from the change. The following are examples of amendments that cannot be done retroactively: • Change the plan eligibility requirement from 3 months to 12 months. • Change the requirement to share in a match contribution for the plan year from 1 hour to 1000 hours. • Add a “last day” requirement to share in an employer contribution for the plan year. • Remove provisions for Safe Harbor contributions. Notice that in each example above, a participant could possibly lose a benefit from the plan that he/she was originally informed would be available. The amendment for any of the above examples must be executed prior to the effective date. The following are examples of amendments that may be done
Related Questions
- Is a restated document required when submitting an individually designed plan for review within its remedial amendment cycle, or can all the amendments be attached to the existing document?
- Is a restated document required when submitting a pre-approved plan for review within its remedial amendment cycle, or can all the amendments be attached to the existing document?
- Can a plan document be amended retroactive to the amendment effective date?
