Filing deadline for individually designed plan

[Belgarath]

Wow, for some reason I'm just drawing a blank here. New plan is adopted this year, for employer with EIN ending in 6. So the Cycle A deadline ended on 1/31/07. What is the deadline for filing for a determination letter for this employer? Is it 1/31/2012, or is it some earlier date? I looked through Revenue Procedure 2005-66, and I'm sure it was there and I skipped right over it.

Thanks!

[Kevin C]

Try Section 14 of Rev. Proc. 2007-44. From 14.04, it looks like you have a choice of when to submit.

[Belgarath]

Thanks Kevin. I had actually been messing around with 2007-44 this morning - what a joy it is. But based upon the following:

04 Although a new plan may file off-cycle and will receive review priority under section 14.02 if it is described in section 14.02(2), a new plan does not have to be submitted for a determination letter off-cycle. This is because the initial remedial amendment period for a new plan is extended to the end of the applicable remedial amendment cycle in which the remedial amendment period would otherwise end. See section 5.03.

I'm thinking that they would have until 1/31/2011, or if later the normal "unextended" deadline (date of tax return plus extensions). What do you think?

[Kevin C]

I'll warn you up front that I don't do much with individually designed documents. Here is what I get out of the Rev. Proc.

I'm reading 14.04 as saying your remedial amendment period would end 1/31/2012, the end of the current 5 year cycle for cycle A plans.

If you want to do a priority off-cycle filing under 14.02(2), you will have to file by 1/31/2010. But, that filing would be reviewed under the 2008 cumulative list for cycle D. You would have to restate and submit again by 1/31/2012 because the original letter you receive would expire on 1/31/2012 (14.01). The restatement would be using the cycle A 2010 cumulative list.

Unless you have a unique provision that you want IRS approval on, I don't see any real benefit to submitting off-cycle. You would need to restate and file by 1/31/2012 either way.

[Belgarath]

Thanks Kevin. Maybe we are both trying too hard. When I looked at this again this morning, Section 18 seems to indicate, since this is a DB plan, that it would really be 1/31/2013?

If the plan is - The last day of the

initial cycle (i.e.,

EGTRRA remedial

amendment period) is –

The next six-year

remedial

amendment cycle

ends on -

Defined Contribution January 31, 2011 January 31, 2017

Defined Benefit January 31, 2013 January 31, 2019

Sorry - formatting just isn't working - best I could get...

[John Feldt ERPA CPC QPA]

Is the DB plan considered to be an individually drafted plan (IDP), or a prototype / volume submitter? (Section 18 pertains to pre-approved plans (prototypes and volume submitters) - that's the 6-year cycle).

[Belgarath]

It's considered individually drafted.

[John Feldt ERPA CPC QPA]

Okay, then you can forget January 31, 2013.

Assuming you want a D letter, you could submit the original document now since 01/31/2012 (the next cycle A submission deadline) is more than 2 years away, and this filing would be considered on-cycle. You'll still have to restate and submit again before 01/31/2012, however (assuming you want another D letter to cover the next 5 years).

Alternatively, you could do no submission now, but wait until the late 2011, restate into a document that has the cycle A LRMs at that time, and submit the original doc, amendments, and the 2011 document all by 01/31/2012, and I think you would still be okay for your RAP to make any changes upon IRS review, even back to the original effective date. I could be wrong there, but that's how I think 2007-44 reads.

Now, if you don't want a D letter, then you never have to restate (and you're much more brave then me), but you will have to amend for each law/reg change on a timely basis.

[Belgarath]

Thanks J4 - yes, we would want a d-letter. But the more I look at this, the more I come back to Section 12, which refers you Section 7, which seems to get you to 1/31/2011, which is the end of the initial 5-year cycle for individually designed plans - what do you think? Or at the very least, 1/31/2011 would appear to be a "safe" date in this particular circumstance as per the original post, that may possibly be extended under the right combination of circumstances - for example, if an employer first adopts a new plan in 2011.

This does seem unnecessarily complex...

[John Feldt ERPA CPC QPA]

Look further in Section 12 where it talks about the next 5-year cycle. I think it tells us that a cycle A plan's next RAP ends 01/31/2012 (see 12.02, the last column, and look at 12.03). Also look at section 5.03(1) which says:

".03 This section 5.03 extends the remedial amendment period for the disqualifying provisions described below as follows: (1) The remedial amendment period for any disqualifying provision described in § 1.401(b)-1(b)(1) that would otherwise apply under § 1.401(b)-1 is extended to the end of the applicable remedial amendment cycle described in section 6.01 that includes the date on which the remedial amendment period would otherwise end if the disqualifying provision was a provision of, or absence of a provision from,

a new plan

and the plan was intended, in good faith, to be qualified."

and then read 1.03(1) which says:

"(1) The EGTRRA remedial amendment period for individually designed plans extends to the end of the initial applicable five-year remedial amendment cycle as provided in the chart found in section 12.01. Therefore, plan sponsors may avoid unnecessarily filing two determination letter applications by waiting to file their EGTRRA determination letter applications until the twelve-month period preceding the end of the plan’s initial applicable five-year remedial amendment cycle."

When you looked at section 7, you saw "The EGTRRA remedial amendment period is extended to the end of the initial five-year and six-year remedial amendment cycles, respectively."

Well, the six-year cycle does not apply to an IDP plan, so this section is saying that the EGTRRA RAP is extended to the end of the initial 5-year remedial amendment cycle for the IDP plans.

Section 9 tells you that the end of your remedial amendment cycle is determined by using the deadlines for a cycle A plan. Thus, the cycle A deadline for a new plan now, is 01/31/2012. At least that's how I see it anyway. It's as clear as mud, of course.