I uncovered a problem with a new client. He is a self employed real estate agent and formed a profit sharing plan in 1982 that is self-trusted. He has no employees to cover and the plan benefits only him and his wife. He moved the assets over from Smith Barney to Merrill Lynch in 1998 but he did not adopt ML’s prototype plan. It appears that no ERISA updates have been done since then. And, no 5500EZ’s have been filed but total assets are over the filing requirement for probably about ten years.

Seems to me there are two issues. One is to update the plan, perhaps by adopting the Merrill Lynch prototype. Is that all that is needed to correct that issue or is there something to file with the DOL?

The other is to file the returns. I read that 5500EZ’s are not eligible for the Delinquent Filer Voluntary Compliance Program. So would we jsut file all the applicable years and write a letter asking that penalties be waived?

Thank you,
Liz