IRS Issues First Required Amendments List for Qualified Plans

In a previous blog, we discussed the IRS’ elimination of its five year staggered determination letter cycle for individually designed plans.  The IRS recently provided guidance to help sponsors of individually designed plans keep their plans in compliance with applicable law.  Notice 2016-80 contains the first Required Amendments List (the “RA List”) for individually designed qualified retirement plans.  In general, the RA List is a list of changes in the plan qualification requirements for changes that became effective in 2016.  The list is divided into two parts—(A) changes in qualification requirements that would generally require an amendment to most plans  or to most plans of the type affected by the change and (B) changes that the IRS and Treasury anticipate will not require an amendment in most plans, but might require an amendment due to an unusual provision in a particular plan.  Read More ›

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IRS Issues Additional Guidance on Determination Letter Program

As was previously announced in 2015, effective as of January 1, 2017, the Internal Revenue Service (“IRS”) is eliminating its five year staggered determination letter cycle for individually designed retirement plans. Plans in the current cycle (Cycle A) still may submit their plans for determination letters on or before January 31, 2017.  Pursuant to Revenue Procedure 2016-37, going forward, individually designed plans will only be permitted to submit a determination letter application on initial plan qualification, plan termination and in certain other circumstances as announced by the IRS.

The IRS did not provide much guidance on the other circumstances in which existing plans would be permitted to seek determination letters in the future, other than to provide that it will give consideration to significant changes in the law, new approaches to plan design and the IRS’ current case load and resources. Read More ›

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The IRS Retirement Plan Determination Letter Program – The IRS Taketh and Then Giveth (Some Transition Guide)

Last July, in Announcement 2015-19, the IRS announced that it was terminating its determination letter program for individually designed qualified retirement plans, other than for new or terminating plans.  This week, in Notice 2016-03 the IRS provided us with specific transition guidance on the winding down of its program.  Specifically, the IRS announced that:

  • Controlled groups and affiliated service groups that maintain more than one plan are permitted to file determination letter requests during the “Cycle A” period beginning February 1, 2016 and ending January 31, 2017, only if the Cycle A election for the group was made by January 31, 2012;
  • The expiration dates included in determination letters issued before January 4, 2016 are no longer operative (the IRS plans on issuing guidance to clarify when an employer can rely on its determination letter after a subsequent change in the law or plan amendment);
  • To facilitate the plan sponsor’s transition from an individually designed plan to a pre-approved plan, the deadline for an employer to adopt a pre-approved defined contribution plan and to apply for a determination letter is extended from April 30, 2016 to April 30, 2017 (other than a plan that is adopted as a modification and restatement of a pre-approved defined contribution plan that was maintained before January 1, 2016).
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IRS Announces Changes to Determination Letter Process for Individually Designed Retirement Plans

In Announcement 2015-19, the IRS announced the elimination of the five year remedial amendment cycle for individually designed retirement plans effective as of January 1, 2017.  This means that after January 1, 2017, individually designed retirement plans will no longer be eligible to receive favorable determination letters every five years.  The Announcement leaves the current remedial amendment period, Cycle E that ends on January 31, 2016 (which generally includes employers with Employer Identification Numbers ending in 5 or 0), unchanged.  It also leaves the next remedial amendment period (which generally includes employers with Employer Identification Numbers ending in 1 or 6) “Cycle A”, unchanged, meaning that Cycle A plans may submit determination letter applications until January 31, 2017. Read More ›

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