Cash Balance GUST Question

[Guest CRC02]

This may be a silly question, but . . .

As there is currently a moratorium on determination letters for cash balance plans, are cash balance plans required to submit determination letter applications for GUST by the end of the GUST remedial amendment period?

[Mike Preston]

The moratorium only applies to cash balance conversions, not cash balance plans in general. And, yes, just because the IRS is telling us that they will sit on the application doesn't give us the right to delay the delivery of the egg!

[mbozek]

IRS representatives have stated that the moratorium applies not only to conversions but to the Gust amendments of cash balance plans that have previously recieved IRS determination letters in prior years upon conversion. Sponsors are still required to submit Gust amendments by the end of the remedial amendment period.

[MGB]

There are even some clean, non-converted cash balance plans that are stuck in the moratorium. Some reviewers will let them through, but most are kicked up to the national office and sit.

Yes, you still need to file by the deadline in order to preserve the right to retroactively amend the plan for any problems.

[Mike Preston]

Unless there are other issues involved, Paul Schulz, who is the head of the IRS determination letter program, indicated at the ASPA Academy last month that non-conversion cash-balance plans should not be held up. If you have a cash-balance that is not a conversion and is just sitting at National Office, a simple email to Paul may get it sent back from National to continue its way towards a determination letter.