Prepared By: Patricia K. Keesler
Benefits Law Group
Atlanta, Georgia
Effective as of June 17, 2002, the IRS published guidance for plans that have not been timely amended for GUST. “GUST” is the acronym for various federal laws passed between 1992 and 2000. Generally, the GUST amendment deadline for individually designed plans was the later of February 28, 2002, or the last day of the first plan year beginning on or after January 1, 2001. The guidance provides that to avoid plan disqualification, plans must be filed for a GUST determination letter by September 3, 2002, and pay a late filing fee. The fee is based on the number of participants: $1,000 for 1-100 participants, $3,000 for 101-1,000 participants, and $10,000 for 1,001 or more participants. The plan must also have been timely amended for pre-GUST legislation (e.g., Tax Reform Act of 1986, Unemployment Compensation Act of 1992 and OBRA 1993). If a plan applies within the time period and meets the other conditions, the IRS will treat the plan as if it had been timely amended for GUST. If a plan is not amended and filed for GUST by September 3, 220, the plan will be required to go through the Employee Plan Compliance Resolution System (EPRSC) to avoid plan disqualification and will have to pay higher user fees. Plans that filed late but before this guidance came out (July 17, 2002) are not required to take any further action now. Those plans will be contacted by the IRS and offered a chance to request relief under these new guidelines.