IRS Announcement 2011-82

[Doghouse]

We have an internal debate as to whether Announcement 2011-82, eliminating features of the DL program that "are of limited utility to pan sponsors in comparison with the burdens they impose," applies to 5310 submissions upon plan termination, as well as to 5307 submissions. I don't see that 5310's are included in this change, but if they are, I suppose we need to modify our plan termination process.

Any opinions?

Dog

[Bird]

I think you can still submit for a DL upon termination. If you're using VS or prototypes, it will get somewhat harder as the years go on and the last FDL gets farther and farther away.

I've stopped submitting on terminations for the most part. Considering the higher fees, the length of the process, reliance on master letters, I don't see a big risk.

[mbozek]

I dont know what is gained by getting a DL for the termination of non ERISA p -type DC plan where all amendments are provided by vendor after approval by IRS, account balance was distributed within 1 year of termination and final 5500 was filed. Plan sponsor must keep all records/ documents/DLs/Amendments, etc for the plan forever in case the employer is audited.

[Kevin C]

The IRS is changing how far back they will go with DL requests for pre-approved documents. This came up at the IRS Q&A session at the ASPPA annual conference last year. The speaker said a quality assurance bulletin was issued on the matter.

The QAB starts with:

This Bulletin is an update to QAB 2006-5 and is interim guidance pending the issuance of IRM section 7.11.1.16. A specialist must always verify that a plan under review for a determination letter was properly amended for prior legislation. This bulletin is intended to promote a consistent, equitable approach to this aspect of determination case review. Generally, a specialist is only responsible for verifying one cycle prior to the plan’s current remedial amendment cycle. If a specialist determines additional verification of prior law is required, the specialist must receive managerial approval to expand the scope of the determination.

Here is the link.

http://www.irs.gov/pub/irs-tege/qab_102411.pdf

I agree with the comments on the limited benefits for filing Form 5310 with a pre-approved document. The only ones we have filed in the last few years have been in acquisition situtations where the purchaser insisted it be filed.

[mbozek]

The IRS is changing how far back they will go with DL requests for pre-approved documents. This came up at the IRS Q&A session at the ASPPA annual conference last year. The speaker said a quality assurance bulletin was issued on the matter.

The QAB starts with:

This Bulletin is an update to QAB 2006-5 and is interim guidance pending the issuance of IRM section 7.11.1.16. A specialist must always verify that a plan under review for a determination letter was properly amended for prior legislation. This bulletin is intended to promote a consistent, equitable approach to this aspect of determination case review. Generally, a specialist is only responsible for verifying one cycle prior to the plan’s current remedial amendment cycle. If a specialist determines additional verification of prior law is required, the specialist must receive managerial approval to expand the scope of the determination.

Here is the link.

http://www.irs.gov/pub/irs-tege/qab_102411.pdf

I agree with the comments on the limited benefits for filing Form 5310 with a pre-approved document. The only ones we have filed in the last few years have been in acquisition situtations where the purchaser insisted it be filed.

So a plan sponsor whose p type plan was amended under IRS requirements in 2011 would only need to keep the prior DL issued to the P type sponsor in the prior cycle (2005, 6 or when ever)?

[Bird]

The IRS is changing how far back they will go with DL requests for pre-approved documents. This came up at the IRS Q&A session at the ASPPA annual conference last year. The speaker said a quality assurance bulletin was issued on the matter.

Thanks! I missed that.

[Kevin C]

I advise clients to keep all plan documents and DLs, regardless of how old. We have a client with a plan that goes back to the 1940's. They get a benefit inquiry every couple of years from someone who terminated 10-30 years ago.

I was responding to a comment about needing to include old documents in a future DL request.