Timing of IRS Approval of a DB Plan Termination

[ishi]

We are beginning the plan termination of a DB plan, and wonder how long it takes the IRS to issue a favorable determination letter on the termination. For those of you out there who recently (past 3 years) terminated a straight-forward DB plan, how long has the IRS taken to approve? I recall past terminations taking 7 to 12 months for approval. Is that still the expectation?

[Guest Rae]

We submitted a termination for a one-man plan (sole employee of a corporation he doesn't own) to the IRS in the middle of August 2005. The client received a request for more info at the beginning of December-this was provided to the IRS in less than 2 weeks. The client received the determination letter in the last week of January (letter was dated 12/30/05). This is actually quicker than I expected.

The only other recent submission I've done was for a 28-person DB plan that was submitted in January of 2004--same time as the GUST restatements. That one took a year to go through--IRS letter was received in January 2005.

This link shows the current IRS status on reviewing submissions:

http://www.irs.gov/retirement/article/0,,id=150182,00.html

Hope this helps.

[ishi]

Thanks - that does help.

I still am looking for others to chime in on their recent experience. I'm looking for information on non-sole proprietor plans.

[david rigby]

Plan with less than 10 lives. Submitted From 5310 in Oct 05. IRS requested more info first week of Jan 06. We were very surprised at that timeliness. (Not yet complete, but I expect no problems.)

[Guest pensionadmin]

We submitted 30 life DB plan on December 13, 2004 and received favorable determination letter on May 20, 2005. No additional information was requested. We were happy with the turnaround!