Guest Article

(From the September 15, 2008 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

IRS Posts Information on Cycle C Filing Requirements for Governmental Plans

IRS has posted on its Web site (www.irs.gov/retirement) a set of FAQs that provides useful information on the submission of governmental plans in the initial remedial amendment Cycle C, which ends on January 31, 2009. Indicating that IRS is willing to work with sponsors whose plan document consists of documents from various sources -- or whose plan never previously received a favorable determination letter -- the FAQs outline avenues of approach for such sponsors and clarify some of the unique requirements applicable to governmental plans.

Some of the highlights from the FAQs are summarized below.

Plan Documentation

Recognizing that governmental plans may have no single cohesive plan document, and IRS normally requires a plan document to be restated when it is submitted for determination, IRS will accept an application that is not restated (e.g., portions of a statute applicable to the plan containing general plan provisions along with other documents binding on the plan containing additional plan language). The materials must be submitted in an organized manner so IRS reviewers can readily determine the applicable plan language.

In addition to the plan document, copies of the timely-adopted good faith EGTRRA and other required amendments need to be provided. Alternatively, the sponsor may provide a summary of the amendments and a certification that they were timely adopted. If a summary is provided, IRS may request the sponsor to submit some or all of the amendments for verification.

No Prior Determination Letter

If the plan has never received a favorable determination, it can be submitted without documentation for all prior years -- only verification of timely GUST compliance is needed. If the plan was not timely amended, it should be submitted under the VCP program instead of in a request for determination.

Redlined Documents

Redlined documents will not be required. The FAQs indicate that Rev.Proc. 2008-6 will be revised to eliminate this requirement.

Compliance with IRC § 401(a) "Permissible Normal Retirement Age" Regulations

Final Treasury regulations under IRC § 401(a) regarding permissible normal retirement ages are not effective for governmental plans until plan years beginning on or after January 1, 2009. Therefore, even though listed in the Cumulative Bulletin, IRS will not review governmental plans for compliance with those regulations in this Cycle C.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.572.7677, Bart Massey 202.220.2104, Mark Neilio 202.378.5046, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Tom Veal 312.946.2595, Deborah Walker 202.879.4955. Copyright 2008, Deloitte.