Is a Determination Letter application required for a retroactive amendment under VCP?

[cpc0506]

I am working with a client who has requested that a retroactive amendment be made to their current AA. The plan is on a pre-approved prototype defined contribution document. They know that the amendment must go through the VCP program.

Number 7b on the Form 8950 asked if I have concurrently submitted a Form 5300 series? I have answered the question 'no' as I was under the impression that the service is no longer accepting Determination Letter request for pre-approved plans. Am I correct in my assumption?

By answering 'no', the form instructs me to provide an attachment explaining why we did not file. What should the attachment say?

Thanks for your help with this matter.

[Tom Poje]

Section 4 of the just released (January 4, 2016)

Rev. Proc. 2016–8

says:

4) In general, plan amendments whereby sponsors amend their plans by adopting, word-for-word, the model language contained in a revenue procedure which states that the amendment should not be submitted to the Service and that the Service will not issue new opinion, advisory, ruling or determination letters for plans that are amended solely to add the model language; and

[JJRetirement]

What kind of retroactive amendment are they requesting? Is it to correct an operational error, is it a late interim amendment? Would it change the pre-approved language so that the plan would not be a word for word adopter?

[cpc0506]

It is an operational failure. Based on an employee's employment contract he signed, he were not eligible for any employer offered benefits. But 401k plan did not exclude such an employee and the plan had immediate entry. Client now wants to add an excluded class of employees - those whose employment contract excludes them.

Employee was hired in 2014 and as TPA we were not told of the employee until we started doing the 2014 valuation work.

And no, it would not change the pre-approved language.

[JJRetirement]

I'm not sure that there has been guidance that specifically answers your question. Under Rev. Proc 2013-12, section 6.05(2)(a), a determination letter application is required because you are correcting an operational failure by plan amendment during an "on-cycle" year based on the 6 year cycle for pre-approved DC plans. But if the plan is a M&P plan or a word for word adopter of a VS plan, you are correct that you can't submit on 5307. I fear that the answer may be that you need to file a 5300, and the plan would be reviewed using the current cumulative list.

You raise another potential issue-

Was the contractual provision a one-time irrevocable waiver to not participate in any qualified plan? That would be a stickier situation than failure to exclude someone in an excluded category identified by something like job title.