If an employer that sponsors an individually-designed plan switches to a prototype, are there any employee notification requirements analogous to the notice to interested parties? Assume, for example, a Cycle C filer switches from an IDP by adopting a newly-approved prototype by January 31, 2009. Obviously, the switch eliminates (generally speaking) the requirement to file a determination letter request, but I'm concerned that I not overlook any notification requirements that go along with the switch.

Thanks.

No notice requirements--but a new SPD obvioulsy should be distributed timely.

Hey, Larry,

Is a new SPD triggered solely by reason of the switch from IDP to prototype, or are you speaking more generally, assuming that either the 5 or 10 year time frame might be up or that some design changes are in play?

Switching from an IDP to a Prototype also triggers a 5307 application, so whenever you do one of those, there's a notice to interested parties as well.

Hi, John --

A new SPD is not triggered specifically by the switch to a prototype. But, since the prototype AA will generate an SPD, and since there may be some slight changes as a result of the switchover (e.g., new default beneficiaries, new death distribution timing, cash or in-kind distributions, limitations on # of loans, new language in SPD's 402(f) notice, etc.), I think it's good practice to distribute a new SPD every time a new AA is generated or every time there's a new amendment and restatement--especially now, since an EGTRRA restatement will be based on final regs and will have more specific explanations of some new provisions (like mandatory rollover language, or, perhaps, non-spouse rollover language).

401 -- You're right about the requirement for a Notice to Interested Parties if an IRS submission is made. In my experience, however, very few employers adopting a prototype elect to submit for a favorable determination letter.