EGTRRA Remedial Amendment Period

[J Simmons]

I am preparing the 5307 application for an EGTRRA determination letter for a plan I restated last week. The original effective date of the plan is 5/1/97, the first plan year ending 4/30/98. We applied for received a GUST II letter in 2002. Due to the small employer exception, we did not pay a user fee to the IRS.

In re-reading EGTRRA sec 620, it would appear that we may qualify once again for the exemption from the user fee if our EGTRRA application is made before the end of the RAP that begins before the end of the end of the 5th year of the plan. The plan's 5th year ended on 4/30/2003. Thus, if the EGTRRA RAP began on or before 4/30/2003, we'd be exempt once again from the user fee.

I am assuming that the EGTRRA RAP began 1/1/2002, as that is the date some of the EGTRRA provisions took effect. Does anyone know of an IRS pronouncement that specifies the beginning date of the EGTRRA RAP?

[J Simmons]

I've found the answer to my question: EGTRRA RAP began 1/1/2002 for DC plans, 1/1/2001 for DB plans.

Notice 2003-49 (August 11, 2003):

III. Beginning of EGTRRA Remedial Amendment Period for User Fee Purposes

For a defined contribution plan, the earliest date on which the plan's EGTRRA remedial amendment period could have begun is January 1, 2002. The first day of the 5-year period ending on January 1, 2002, is January 2, 1997. Thus, if a determination letter application for a defined contribution plan is filed within the plan's EGTRRA remedial amendment period, the application may be eligible for elimination of the user fee provided the plan was first in existence after January 1, 1997.

For a defined benefit plan, the earliest date on which the plan's EGTRRA remedial amendment period could have begun is January 2, 2001. (Although EGTRRA is generally effective for years beginning after December 31, 2001, section 611(a) of EGTRRA, which increased the defined benefit dollar limit under § 415 of the Code, is effective for limitation years ending after December 31, 2001. January 2, 2001, is the earliest date section 611(a) of EGTRRA could be effective for a plan and, thus, the earliest date on which a defined benefit plan's EGTRRA remedial amendment period could have begun.) The first day of the 5-year period ending on January 2, 2001, is January 3, 1996. Thus, if a determination letter application for a defined benefit plan is filed within the plan's EGTRRA remedial amendment period, the application may be eligible for elimination of the user fee provided the plan was first in existence after January 2, 1996.

The guidance in this notice amplifies but does not supersede the guidance in Notice 2002-1. Thus, pursuant to Q&A-12 of Notice 2002-1, if a determination letter application for a plan is filed within the plan's GUST remedial amendment period, the application may be eligible for elimination of the user fee provided the plan was first in existence on or after December 9, 1989.