“Good Faith” EGTRRA Amendments Must Be Adopted in the 2002 Plan Year

Before the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") was enacted, tax-qualified retirement plans were allowed to comply with new law in operation until the date (usually years later) by which plan amendments were required. The Internal Revenue Service, perhaps recognizing that operational compliance can be difficult in the absence of written plan documents, has announced that "good faith" EGTRRA amendments must be adopted in the first year that a plan operates in compliance with the new law.

IRS Notice 2001-57 states that "good faith" EGTRRA amendments are required in two situations:

• The tax-qualified retirement plan is required to implement an EGTRRA provision for a given plan year, and existing plan language is not consistent with the EGTRRA provision.