Rev Proc 2007-44

[t.haley]

I am trying to understand Section 17.04 of Rev Proc 2007-44 regarding intended adopters. It states that if the employer's 5 year remedial cyle ends "during or after" the 6 year pre-approved cycle, the employer should adopt the newly approved version of the pre-approved plan instead of executing a Form 8905. My client adopted a GUST plan on April 1, 2005 so is not a "prior adopter". They are on the 5 year Cycle D which ends January 31, 2010. Is this considered "during" the 6 year cycle, so they don't have to execute a Form 8905 prior to 1/31/10? And if so, what is their deadline for adopting the new pre-approved plan - 4/30/2010 or 1/31/2010? I am considering having them sign the Form 8905 and adopting the new plan by 4/30/2010. Any guidance will be greatly appreciated!

[Kevin C]

What kind of document was adopted April 1, 2005? "GUST plan" sounds like a pre-approved document. The individually designed documents I've seen adopted in that time period included EGTRRA language.

I read 17.04 as saying that a sponsor with an individually designed plan can get on the 6 year restatement cycle by executing Form 8905 before the end of their current 5 year cycle. It goes on to say that if the current 5 year cycle ends after the new pre-approved document receives an opinion letter, instead of filing Form 8905, they should adopt the new pre-approved document and they will be considered a new adopter under 17.03.

So, I would say that if the April 1, 2005 document was individually designed, they need to adopt the EGTRRA pre-approved plan by 1/31/2010, the end of their current 5 year cycle. I know the last sentence of 17.04 says "should" and not "must", but I would still have them adopt by 1/31/2010.