Operational Failure on Eligibility

[zimbo]

Under Rev Proc 2008-50, a plan that erroneously allowed an otherwise ineligible participant to enter may adopt a retroactive plan amendment. This amendment can alter the eligibility or entry date terms so the employee(s) who entered is made retroactively eligible.

This is an approved correction method in Appendix B, Section 2.07 for plans that already have favorable determination letters. However it is less than clear whether such amendment would need to then be submitted to IRS for a determination letter. Section 6.05(2)(b) seems to indicate that a submission is needed by the end of the next "on-cycle" year (whatever than means). The particular plan that I am working on is a Volume Submitter with a FDL.

Does anyone know for sure whether an IRS submission is required for such an amendment and, if so, what is the deadline? Thanks.

[K2retire]

I believe the example in Appendix B concludes by saying that the plan files for a D letter, but I don't have it in front of me at the moment.

[Trekker]

I am looking at the same question. The failure was only in 2008. Section 4.05(2) of the Rve. Proc.2008-50 provides the amendment correction method in the Self-Correction program, but only for Operational Failures listed in Section 2.07 of App. B. Moving along to App. B, I find the exact scenario in Section 2.07(3) as an example.

Circling back to Section 4.10, a determination letter may be required, then it refers you to Section 6.05.

Following the bread crumbs to Section 6.05(b), we get back to your question about the next on-cycle year.

Our plan in question happens to be in the midst of its on-cycle year (Year D), so we will include the corrective amendment with the restatement and will provide the required statements in the cover letter as listed in 6.05(b).

You are working with a volume submitter plan that already has a favorable D.L. I think your next on-cycle year would be the two-year window for the next Volume Submitter remedial amendment period. I'm not 100% on this, though. Hope this helps.