dmwe Posted January 15, 2014 Share Posted January 15, 2014 I'm a TPA working with a governmental plan that's been restated on a new individually designed document. Their lawyer is saying the per Rev Proc. 2007-44 they are required to file for a determination letter. I'm not sure if this is greed or ignorance. Surely no one is required to file for a determination letter are they? Especially governmental plans. Thanks in advance for clarification. Link to comment Share on other sites More sharing options...
My 2 cents Posted January 15, 2014 Share Posted January 15, 2014 As a general rule, to survive in the modern world, it is a good idea to do what your lawyer tells you to do! Always check with your actuary first! Link to comment Share on other sites More sharing options...
PensionPro Posted January 15, 2014 Share Posted January 15, 2014 Filing for DL is not REQUIRED. Is the lawyer providing a cite from RP 2007-44? PensionPro, CPC, TGPC Link to comment Share on other sites More sharing options...
dmwe Posted January 15, 2014 Author Share Posted January 15, 2014 Not a cite exactly, just a reference to the Rev. Proc. Link to comment Share on other sites More sharing options...
david rigby Posted January 15, 2014 Share Posted January 15, 2014 Whether to file is a question that should be answered by the plan sponsor, not the TPA. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
Carol V. Calhoun Posted January 15, 2014 Share Posted January 15, 2014 No plan is required to file for a determination letter. However, given the complexity of the law today, no lawyer I know is ever willing to give an opinion that a plan is qualified. And the consequences of disqualification are potentially serious, even in the case of a governmental plan. (Although deductions and trust taxation are not an issue, they still need to worry about employer withholding obligations and tax consequences to participants.) I suspect that what the lawyer meant to say is, a) it is highly advisable to have a determination letter, and b) if they are going to get a determination letter, Rev Proc. 2007-44 requires them either to get it in Cycle C (before January 31 of this year) or during Cycle E. But why is this question on the 403(b) Plans, Accounts or Annuities board? A determination letter would apply to a 401(a) plan, not a 403(b)? Employee benefits legal resource site The opinions of my postings are my own and do not necessarily represent my law firm's position, strategies, or opinions. The contents of my postings are offered for informational purposes only and should not be construed as legal advice. A visit to this board or an exchange of information through this board does not create an attorney-client relationship. You should consult directly with an attorney for individual advice regarding your particular situation. I am not your lawyer under any circumstances. Link to comment Share on other sites More sharing options...
Kevin C Posted January 15, 2014 Share Posted January 15, 2014 Are they going to file under Cycle E for this cycle? In Rev. Proc. 2012-50, it says the election to delay to Cycle E is made by filing for a determination letter under Cycle E timing. To me, that reads as requiring a determination letter submission if you want to delay restatement until cycle E. Link to comment Share on other sites More sharing options...
Belgarath Posted January 15, 2014 Share Posted January 15, 2014 I suppose they could sign an 8905 prior to 1/31/2014, even if they don't really intend to adopt a pre-approved plan - this would delay the restatement deadline, right? Link to comment Share on other sites More sharing options...
Peter Gulia Posted January 15, 2014 Share Posted January 15, 2014 In addition to others' observations, a mention of "required" could refer to something other than public law. Just to pick two quick examples: An employer might have an obligation under a collective-bargaining agreement. A plan or its trust might have an obligation under a participation agreement with an investment issuer or manager. Or there could be a requirement or condition under non-tax law, including State or local law concerning the acts of the governmental person that establishes or maintains a plan. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
masteff Posted January 16, 2014 Share Posted January 16, 2014 Since this thread is in the 403(b) forum, by "govt plan" do you mean 403(b)? Per Announcement 2009-89: "Accordingly, employers should not request ruling or determination letters on the form of their § 403(b) plans at this time, pending publication of the revenue procedure for pre-approved § 403(b) plans and additional procedures on applying for individual determination letters for § 403(b) plans." http://www.irs.gov/irb/2009-52_IRB/ar25.html http://www.irs.gov/Retirement-Plans/IRC-403(b)-Tax-Sheltered-Annuity-Plans-%E2%80%93-Guidance-Affecting-403(b)-Plans EDIT: even better.... http://www.irs.gov/Retirement-Plans/Apply-for-an-Opinion-or-Advisory-Letter--Pre-Approved-403(b)-Plans "Please note that the IRS does not intend to establish a determination letter program for individually designed 403(b) plans at this time." Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra Link to comment Share on other sites More sharing options...
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