Expert: Allen - 2/2/2010

Question
Our plan has a last day of the year as 12-31, and gives a profit share on that day if you are employed on that day (part of plan documentation). Can the plan relax this for a good/hardship reason and remain compliant to the plan? Can a large layoff that occurs shortly before the defined date be used as a waiver situation to the documented plan? (of course assuming that the company wants to go ahead and contribute)

Answer
The plan would have to be amended to change the employees who receive an allocation of the contribution. The amendment can apply to a single plan year.

While this can be done, the plan should be amended before the end of the plan year. If it's for the 2009 plan year, I believe it's too late. However, I'm not an attorney and you will need to check this with the attorney for the plan.