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Ret plans - amendments required, incl. EGTRRA

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IRS Correction Program Now More Efficient
"The IRS introduced the most recent EPCRS transformation in September 2018, through Revenue Procedure 2018-52, which becomes effective next month, on April 1, 2019. The biggest change is to the VCP submission procedures. The IRS will no longer accept VCP submissions through the mail-in hard-copy form; instead, Plan Sponsors must use the website for VCP submissions." (Jackson Lewis P.C.)
IRS Requires Electronic VCR Applications Beginning April 1
"Beginning April 1, 2019, applicants seeking to resolve employee benefit tax qualification issues via the Voluntary Compliance Resolution (VCR) program must submit applications electronically through Any paper VCP submissions sent to the IRS with a postmark after March 31, 2019, will be returned to the applicant." (Solutions Law Press)
403(b) Plan Remedial Period Closing Less Than Year from Now
"While the March 31, 2020 deadline may seem far off, the correction process requires significant time. Since amendments to the plan document must be retroactive to January 1, 2010 (or the plan's effective date, if later), a review must be done to evaluate both [1] all amendments made to the plan since that date, and [2] whether the plan has in fact been administered consistently with the plan document since that date." (Sheppard Mullin)
Time to Review 403(b) Plans for Compliance with IRS Requirements
"The IRS has established a pre-approved plan program under which a plan sponsor has until March 31, 2020, to retroactively adopt a plan document which the IRS has already opined complies with the requirements of Internal Revenue Code section 403(b). A plan sponsor should analyze whether a pre-approved plan document works administratively and structurally with its objectives. The IRS has indicated that it does not intend to establish a determination letter program for individually designed section 403(b) plans." (Miller Canfield)
[Official Guidance] VCP Submission Kit: Failure to Have Adopted a New Pre-Approved Defined Contribution Plan by the April 30, 2016 Deadline
"Plan sponsors may use this Voluntary Correction Program (VCP) Submission Kit if they: didn't adopt an updated pre-approved defined contribution (DC) plan for the Pension Protection Act (PPA) by April 30, 2016, and want to correct this failure by adopting an updated pre-approved DC retirement plan to bring their plans back into compliance.... As a plan sponsor, you'll need to take additional steps to correct any other failures." (Internal Revenue Service [IRS])
#10YearChallenge for 403(b) Plans
"The restatement deadline is an opportunity to retroactively restate the plan document (generally, to January 1, 2010) to correct any defects in the terms of the plan documents, such as missed plan amendments. It is also the last chance for tax-exempt employers with individually designed plan documents to restate onto a pre-approved document, as the IRS does not now, and does not intend to, issue approval letters for individually designed 403(b) plans" (E is for ERISA)
No VCP Fee Relief in Updated Rev. Proc.; Some Fees Increased
"Unlike prior years, the 2018 VCP fee was determined by reference to net plan assets with no reduced fees for minimum distribution, participant loan, or plan amendment failures.... The revised schedule drew some criticism from trade groups that advocated for a return to some of the reduced fees for common failures.... The updated procedure for 2019 in [Rev. Proc. 2019-04] does not budge on the VCP fees[.]" (Buck)
[Official Guidance] Text of IRS Rev. Proc. 2019-4: Revised Procedures for Determination Letters and Letter Rulings
"This revenue procedure is a general update of Rev. Proc. 2018-4 ...

"[4] Section 8.03(1) is modified to add Section 414(b), (c) and (m) to the list of sections for which a determination is not made when a determination letter is issued in accordance with this revenue procedure.

"[5] Section 9.03 is modified to clarify that in order for a plan to be reviewed for, and a determination letter relied upon with respect to, whether the terms of the plan satisfy one of the design-based safe harbors in Sections 1.401(a)(4)-2(b) and 1.401(a)(4)-3(b) ... the plan document must provide a definition of compensation that satisfies Section 1.414(s)-1(c)....

"[8] Section 24.03 is modified to provide that Employee Plans Rulings and Agreements will consider a request for an extension of time for making an election ... to recharacterize annual contributions made to a Roth IRA. Employee Plans Rulings and Agreements will also consider recharacterization requests ... that relate to a conversion or rollover contribution to a Roth IRA but only if the rollover or conversion was made prior to January 1, 2018.

"[9] Section 24.03 is modified to clarify that SB/SE Exam will be notified if a request for an extension of time for making an election or other application for relief under Section 301.9100-1 is submitted when the return is under examination....

"[11] Section 30.07(2) is modified to provide that beginning April 1, 2019, VCP submissions and the applicable user fees must be made using Section 30.07(3) is modified to clarify that the payment of user fees for pre-approved plan submissions and letter ruling requests may not be made using and that such requests must still be accompanied by a check in the amount of the applicable user fee....

"[15] Appendix A .06(1)(c) is modified to reflect that the user fee for Form 5310 will increase from $2,300 to $3,000 for submissions postmarked on or after July 1, 2019." (Internal Revenue Service [IRS])

[Guidance Overview] Puerto Rico Qualified Plans Must Adopt Hurricane Maria Tax Relief Provisions by December 31, 2018
"Although the amendment is not considered a 'qualification amendment,' and therefore, it does not have to be filed with the Puerto Rico Treasury Department for an updated determination letter, it must be timely adopted to ratify the tax relief benefits granted on such eligible distributions and loans." (McConnell Valdes)
IRS Releases 2018 Required Amendments List for Qualified Retirement Plans
"Certain annual, monthly, or other periodic changes to amounts and items are considered to be included on the RA List for the year in which the changes are effective, even if not directly referenced on the RA List.... [T]he IRS expects that few plans have provisions that need to be amended for these changes." (Findley)
2018 End of Year Plan Sponsor 'To Do' List: Qualified Retirement Plans
Action Items for: [1] All qualified plans; [2] Section 401(k) plans; [3] Defined contribution plans (other than Section 401(k) plans); [4] Defined benefit plans; and [5] Section 403(b) plans. (Snell & Wilmer)
[Official Guidance] Text of IRS FAQs on 403(b) Pre-Approved Plan Program: Eligible Adopting Employers and Reliance on Letters
"Who can adopt a 403(b) prototype or volume submitter specimen plan? ... What is an IRS opinion or advisory letter for a 403(b) pre-approved plan? ... To what extent can an adopting employer rely on a 403(b) prototype plan's opinion letter? ... To what extent can an adopting employer rely on a 403(b) volume submitter plan's advisory letter?" (Internal Revenue Service [IRS])
[Guidance Overview] IRS Issues Proposed Regs for Hardship Distributions
"[1] Clarification of Code Section 165 casualty loss deduction ... [2] Additional safe harbor for certain disasters ... [3] Extension of relief for victims of Hurricanes Florence and Michael ... [4] Elimination of six-month suspension period ... [5] Elimination of requirement that participant take all available plan loans ... [6] Expansion of available sources ... [7] Elimination of 'facts and circumstances' test ... [8] Plan amendment deadlines." (Ice Miller LLP)
Year-End Considerations for Retirement Plans, Part 2
"Plan sponsors may use forfeitures to fund QMACs and QNECs ... Plan sponsors may expand 401(k) and 403(b) hardship provisions ... Plan limits ... PBGC premium increases." (Morgan Lewis)
[Official Guidance] Text of IRS Form 4461: Application for Approval of Standardized or Nonstandardized Pre-Approved Defined Contribution Plans (PDF)
Rev. Nov. 2018. "Form 4461 is used to apply for approval of standardized or nonstandardized pre-approved defined contribution plans.... A provider or mass submitter of a pre-approved defined contribution plan may file a Form 4461." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Form 4461-B: Application for Approval of Standardized or Nonstandardized Pre-Approved Plans (PDF)
Rev. Nov. 2018. "Use Form 4461-B to apply for approval of a plan submitted by a mass submitter on behalf of an adopting provider, which is based on a plan submitted by the mass submitter.... Only mass submitters may file this form." (Internal Revenue Service [IRS])
Year-End Considerations for Retirement Plans, Part 1: Closing Out 2018
"[1] The IRS Required Amendment list ... [2] Qualified 2016 disaster distributions ... [3] Safe harbor 401(k) plans ... [4] Claims and appeals rules regarding disability benefits.... [5] Participant notices." (Morgan Lewis)
IRS Reminder: Pre-Approved Filing Deadline Rapidly Approaching
"The on-cycle filing deadline for third cycle pre-approved defined contribution plans ends December 31, 2018. Please note the changes to the mailing address and shortened response times for follow-up requests for third cycle applications." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Notice 2018-91: 2018 Required Amendments List for Qualified Retirement Plans (PDF)
"[The] RA List does not include guidance issued or legislation enacted after the list has been prepared and also does not include: [1] Statutory changes in qualification requirements for which the Treasury Department and the IRS expect to issue guidance ... [2] Changes in qualification requirements that permit (but do not require) optional plan provisions.... [3] Changes in the tax laws affecting qualified plans that do not change the qualification requirements under Section 401(a) ... There are no entries listing changes in qualification requirements on the 2018 RA List." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Form 8717-A: User Fee for Employee Plan Opinion Letter Request (PDF)
Rev. Sept. 2018. "What's New: Specific user fee amounts are no longer listed on Form 8717-A. You must now enter the appropriate user fee when completing line 5." [Also available as a fillable PDF form.] (Internal Revenue Service [IRS])
2019 Planning for ERISA Single-Employer Defined Contribution Plan Operations (PDF)
"[This calendar] will help you set up your own schedule of activities to address as the year progresses so that you do not miss important deadlines for your qualified plans.... [The companion] Reporting and Disclosure Guide will help you identify and address other activities that are event-based and participant-specific.... [This article also discusses] several key issues for you to consider (along with the calendar deadlines) as we head into 2019." (Buck)
Significant Changes in VCP Fees Affect Small Benefit Plans
"For plans with 1‑50 participants that would have paid a VCP fee of $500-$750, ... effective January 2, 2018 ... Rev. Proc. 2018‑4 ...upended the VCP fee schedule in favor of a model based on assets with a minimum fee of $1,500 that doubled or tripled what they would have paid even one day earlier.... [T]he transition of VCP fees is summarized [in chart form]." (Belfint Lyons Shuman)
[Guidance Overview] IRS Announces Submission Extension for Cycle 3 Pre-Approved Defined Contribution Plans (PDF)
"Among the issues that the IRS [still] needs to address are: [1] Clarifications on the extent of reliance on an opinion letter; [2] The new requirement to exclude the trust provisions from a pre-approved plan document; [3] Issues relating to interim amendments; [4] The need for updated submission forms; [5] Guidance on Church Plan provisions. Without clarification from the IRS, these issues will make Cycle 3 plan document submissions uncertain and more time consuming for document drafters and adopters." (ASC)
Affected Parties Suggest Reasons, Methods for Expanding IRS Determination Letter Program
"The circumstances believed to warrant determination letter applications included: [1] Significant legislative and regulatory changes; [2] Significant plan design changes; and [3] Mergers and acquisitions.... Under one suggested approach for obtaining an IRS stamp of approval, the agency would establish or provide official recognition of a third-party certification system to fill the void left when it contracted the determination letter program -- an idea that the IRS raised years ago in a 2001 White Paper." (HR Daily Advisor)
Stakeholders Propose Ideas for Expanding the Determination Letter Program
"The main themes in comments from employee benefits trade organizations ... included: [1] Significant legislative and regulatory changes ... [2] Significant plan design changes ... [3] Mergers and acquisitions ... The comments also included recommendations on other avenues for obtaining the IRS stamp of approval[:] Third-party certification ... Letter rulings ... [and] Limited scope reviews." (Conduent)
[Guidance Overview] IRS Umbrella Closing Agreement Program Available to Correct Missed Deadlines
"Financial institutions and providers can still make corrections through the Voluntary Correction Program. However, with the umbrella closing agreement option, there does not have to be a system-wide error. Instead, this allows the financial institution to seek correction across a group of employers. An umbrella closing agreement correction can be more cost-effective and simpler for providers looking to make group corrections." (Butterfield Schechter LLP)
IRS Appears Likely to Expand Determination Letter Program in 2019
"The end of the [cycle-based program in 2017] left plan sponsors with no way to obtain a confirmation from the IRS that their plans continued to satisfy the formal requirements for qualification after multiple amendments and changes to the law. Based on recent IRS announcements, however, it appears that individually designed plans will have restored access to the program, possibly as soon as next year." (Verrill Dana LLP)
[Official Guidance] Text of IRS Form 14568-B: Model VCP Compliance Statement -- Schedule 2: Other Nonamender Failures and Failure to Adopt a 403(b) Plan Timely (PDF)
"The plan identified above was not amended to comply with the applicable provisions of the following legislative and regulatory requirements by the applicable deadlines in accordance with Internal Revenue Code (IRC) Section 401(b) and the regulations thereunder[.]" [Rev. June 2018] (Internal Revenue Service [IRS])
[Opinion] Joint Trade Association Letter to Senators Proposing SCP Expansion Be Included in Senate IRS Reform Proposal (PDF)
"[This] proposal would direct the IRS to expand the self-correction program (SCP) within the IRS's Employee Plan Compliance Resolution System (EPCRS), to enable businesses with retirement plans to more easily correct common mistakes. Expanding SCP to address common mistakes enables businesses to fix these problems without a submission to the IRS and the payment of a user fee. Timely and efficient correction protects participating employees by providing them with their expected retirement benefits, including favorable tax treatment." (American Society of Pension Professionals & Actuaries [ASPPA])
[Opinion] Groom Law Group Urges IRS to Expand Determination Letter Program
"[Groom Law Group submitted letters] recommending consideration of the following plans as applicants for updated determination letters: [1] Plans with a cash balance or similar benefit formula whose last determination letter was before the effective date of the final IRS hybrid plan regulations. [2] Plans that address income replacement and inflationary pressures through adoption of a variable annuity feature. [3] Traditional pension plans that convert to a cash balance-type formula. [4] Plans that undergo major changes that otherwise make certain compliance testing unnecessary -- such as safe harbor 401(k) plans. [5] Plan changes accompanying significant workforce adjustments, such as downsizings or corporate separations. [6] Corrective plan amendments submitted as part of an EPCRS submission. [7] Governmental plans where there has been a significant change in the governing state or local law." (Groom Law Group)
Pre-Approved DB Plan Restatement Period Opened May 1, 2018
"If your defined benefit plan is currently on a pre-approved document or if you want to start using a pre-approved document, it is time to begin the plan restatement process." (Warner Norcross & Judd LLP)
House Subcommittee Chair, Ranking Member Press IRS for VCP Update
"In a letter to Sunita Lough, Commissioner of the IRS's Tax Exempt/Government Entities (TEGE) division, ... Subcommittee Chairman Dave Brat (R-VA), and Ranking Member Dwight Evans (D-PA)... [asked] [1] If the IRS planned to expand the Self-Correction Program; if so, how, and if not, why not; [2] To explain 'how the Self-Correction Program is limited because of 'real tax consequences to the participants'; [3] To provide an update on whether the program would be streamlined, if so how and when, and if not, why not." (American Society of Pension Professionals & Actuaries [ASPPA])
Unapproved 403(b) Plan Documents: Plan Sponsors Can Take Remedial Steps Now
"[1] If your plan was established or restated in the last year, confirm whether or not your current document is a pre-approved prototype or volume submitter plan with an opinion or advisory letter. If so, it is likely that no further action is required. [2] If the current plan document does not have an opinion or advisory letter, consider adopting ... a pre-approved plan document retroactively to January 1, 2010 or, if later, the plan's effective date." (Benefits Bryan Cave)
[Opinion] ERIC Comment Letter to IRS on the Determination Letter Program
"Plan sponsors should be allowed to request a determination letter during the 2019 calendar year with respect to a plan merger that has occurred since the plan's last determination letter was issued ... Hybrid plans, employee stock ownership plans (ESOPs) and plans incorporating a non-safe harbor accrual or allocation formula should be allowed to request a determination letter with respect to certain matters on which the IRS did not previously opine ... IRS should consider establishing or providing official recognition of a third-party certification system that would fill the void left by the suspension of the determination letter program[.]" (The ERISA Industry Committee [ERIC])
[Opinion] American Benefits Council Letter to IRS in Support of Expanded Determination Letter Program for Individually Designed Plans
"[C]ertain types of individually designed plans and transactions [are] particularly in need of access to the program.... [1] Significant plan design changes, especially defined benefit plan changes ... [2] Multiple employer plans and multiemployer plans ... [3] Corporate transactions ... [4] Significant changes in the law." (American Benefits Council)
IRS Considers Expanding Determination Letter Program in 2019 for Certain Individually Designed Plans
"[T]he IRS announced that it is soliciting comments from the public to help identify any additional types of plans for which it might be appropriate for plan sponsors to be able to request determination letters during the 2019 calendar year.... The public comment period closes on Monday, June 4, 2018." (Compliance Dashboard)
[Official Guidance] Applications for Pre-Approved DC Plan Opinion Letters: Third 6-Year Remedial Cycle
"The IRS is accepting applications for opinion letters for pre-approved Defined Contribution (DC) plans for the third six-year remedial amendment cycle. For the IRS to consider the third cycle's application, the pre-approved DC plan provider must verify compliance with the second cycle's requirements by: [1] Stating that an opinion or advisory letter wasn't requested for the DC preapproved plan for a prior cycle or at any prior time; [2] Attaching the plan's most recent opinion or advisory letter for the second six-year remedial amendment cycle; or [3] Including a satisfactory explanation of why an opinion or advisory letter wasn't requested during the second six-year remedial amendment cycle and how the second cycle's qualification requirements were timely satisfied by employers who adopted the plan." (Internal Revenue Service [IRS])
[Official Guidance] IRS 'Umbrella' Closing Agreement Program Allow Providers of Pre-Approved Plan to Correct Multiple Missed Deadlines
"While plan sponsors may continue to make VCP submissions for correcting a failure to restate their plans by the deadline, the IRS invites financial institutions or other service providers to submit proposals for umbrella closing agreements to correct the same failure on a larger scale by addressing employers affected by the failure as a group." (Internal Revenue Service [IRS])
IRS Requests Input on Possible Expansion of Determination Letter Program in 2019
"The Treasury and IRS have indicated that they will issue guidance if they identify any additional types of plans that may request a determination letter during 2019. However, they reserve the right not to expand the program at all, given the still limited IRS resources and the focus on tax reform[.]" (Groom Law Group)
[Guidance Overview] IRS Considering Expanding Determination Letter Program in 2019 for Certain Individually Designed Plans
"Following the close of Cycle A on January 31, 2017, the IRS now only makes determinations on individually designed plans for initial plan qualification, for qualification upon plan termination, and in certain other limited circumstances the IRS has described in specific published guidance.The IRS has left open the possibility that it may consider opening up the determination letter program in the future for certain types of individually designed plans. In Notice 2018-24, the IRS is soliciting comments on what specific types of plans it should consider accepting for determination letters in 2019." (Kilpatrick Townsend)
[Official Guidance] Text of IRS Notice 2018-24: Request for Comments on Scope of Determination Letter Program for Individually Designed Plans During Calendar Year 2019 (PDF)
"This notice requests comments on the potential expansion of the scope of the determination letter program for individually designed plans during the 2019 calendar year, beyond provision of determination letters for initial qualification and qualification upon plan termination. In reviewing comments submitted in response to this notice, the [Treasury Department] and the [IRS] will consider the factors regarding the scope of the determination letter program set forth in section 4.03(3) of Revenue Procedure 2016-37.... The Treasury Department and the IRS will issue guidance if they identify any additional types of plans for which plan sponsors may request determination letters during the 2019 calendar year." (Internal Revenue Service [IRS])
Restated Preapproved DB Plans Learn from DC IRS Amendment Cycle
"Taking a page from the books of their DC plan sponsor compatriots that have been through this process, all employers can: [1] Understand the role of the employer in the process. [2] Schedule changes in plan design. [3] Manage the payment of document provider costs.... [4] [C]onsider basing the [cash balance plan] interest-crediting rate on the actual plan asset rate of return. [5] For an employer considering terminating a DB plan, coordinate the restatement process with the termination process. [6] For an employer with an individually designed plan document, consider the pros and cons of moving to a preapproved plan document." (HR Daily Advisor)
[Official Guidance] Text of IRS Rev. Proc. 2018-19: Retroactive Reduction of Form 5310 User Fee (PDF)
"[T]his revenue procedure changes one user fee set forth in Appendix A of Rev. Proc. 2018-4, Schedule of User Fees, with respect to applications on Form 5310, Application for Determination for Terminating Plan. That user fee is reduced from $3,000 to $2,300, effective January 2, 2018. Applicants who paid the $3,000 user fee listed in Rev. Proc. 2018-4 will receive a refund of $700." (Internal Revenue Service [IRS])
[Official Guidance] IRS Announcement 2018-05: Opinion and Advisory Letters for Pre-Approved DB Plans, Deadline for Employer Adoption, and Opening of Determination Letter Program for Adopters (PDF)
Announcement 2018-05 provides that the IRS intends to issue opinion and advisory letters for master and prototype and volume submitter defined benefit plans (pre-approved) that were restated for changes in plan qualification requirements listed in Notice 2012-76 (the 2012 Cumulative List) and that were filed with the IRS during the submission period for the second remedial amendment cycle. The IRS intends to issue the letters on March 30, 2018 or as soon as possible thereafter. The period for employer adoption of these plans will end on April 30, 2020. Starting May 1, 2018, and ending April 30, 2020, the IRS will accept applications for individual determination letters from employers who adopt such plans and are otherwise eligible to submit a determination letter request. This announcement also provides that a delayed beginning date for the third six-year remedial amendment cycle will be announced in future guidance. (Internal Revenue Service [IRS])
[Opinion] ARA Comment Letter to IRS: Revised EPCRS User Fee Structure Is Unfair to Small Businesses (PDF)
"ARA recommends that the IRS immediately amend Revenue Procedure 2018-4 to: [1] Provide that the applicable general VCP user fee is the lesser of the general VCP user fee in effect on January 2, 2018, or the general VCP user fee in effect immediately prior to January 2, 2018, pursuant to Revenue Procedure 2017-4; and [2] Reinstate the special reduced VCP user fees in effect immediately prior to January 2, 2018[.]" (American Retirement Association [ARA])
[Guidance Overview] IRS Reduces Fees to Encourage Employers to File VCPs for Qualified Plan Errors
"The new VCP fees are based on the assets of the plan instead of its participants and are capped at $3,500.... Note that certain types of errors were previously eligible for reduced VCP fees. For example, a VCP covering only a small number of loan failures for non-key employees was eligible for a reduced fee of as little as $300. Most of these special fees have now been eliminated so that the [new fee schedule] will apply to most VCPs." (Mazursky Constantine LLC)
[Guidance Overview] Spousal Consent/J&S Issues Under 403(b) Plans May Trigger Document Conflicts
"[T]he only way the spousal rights rules apply to 403(b)plans is through ERISA Section 205. This means that if you have a non-ERISA 403(b) plan, the spousal rights rules DO NOT apply. Be careful to avoid inadvertently applying them in the restatement.... HOWEVER, many non-ERISA 403(b) annuity contracts impose the spousal rights rules as a matter of contract language ... It is typical for a 403(b) plan to provide a set percentage of pay as the employer benefit under the plan, much like a money purchase plan. There is a very real and unresolved issue as whether or not this set formula makes the plan a 'money purchase plan' which is subject to the J&S rules[.]" (Business of Benefits)
[Guidance Overview] IRS Releases 2017 Required Amendments List for Qualified Retirement Plans
"[1] Cash balance/hybrid plans must be amended ... to comply with the market rate of return and other requirements in the final regulations that become applicable ... for the plan year beginning in 2017. [2] An eligible cooperative plan or eligible charity plan, not already subject to the benefit restrictions under Internal Revenue Code Section 436, generally becomes subject to the restrictions beginning with plan years on or after January 1, 2017....[3] Defined benefit plans that permit benefits to be paid partly in the form of an annuity and partly as a single sum (or other accelerated form) must do so in compliance with Code Section 417(e)." (Findley)
[Official Guidance] Text of IRS Notice 2017-72: 2017 Required Amendments List for Qualified Retirement Plans (PDF)
"This notice contains the Required Amendments List for 2017 ('2017 RA List').... Pursuant to section 5.05(3) of Rev. Proc. 2016-37, this notice provides that December 31, 2019, is generally the last day of the remedial amendment period with respect to a disqualifying provision arising as a result of a change in qualification requirements that appears on this 2017 RA List. As a result, under sections 8.01 and 5.05(3) of Rev. Proc. 2016-37, December 31, 2019, is also generally the plan amendment deadline for a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2017 RA List. However, a later date may apply to a governmental plan ... pursuant to sections 8.01 and 5.06(3) of Rev. Proc. 2016-37." (Internal Revenue Service [IRS])
[Official Guidance] Employee Stock Ownership Plan (ESOP) LRM and Information Package, October 2017 (PDF)
43 pages. Oct. 2017, published online Nov. 2017. "This information package contains samples of plan provisions that satisfy certain requirements of the Code applicable to ESOPs. Such language may or may not be acceptable in specific plans depending on the context in which used. To expedite the review process, plan sponsors are encouraged to use the language in this package. A partnership or a joint venture is not eligible to maintain an ESOP. However, a partnership or a joint venture that has elected to be taxed as a corporation may be a Participating Employer as defined in this ESOP LRM." [Editor's note: the Oct. 2017 revision appears to replace the version released in June 2015.] (Internal Revenue Service [IRS])
[Official Guidance] Cash or Deferred Arrangement LRM and Information Package, October 2017 (PDF)
43 pages. Oct. 2017, published online Nov. 2017. "This information package contains samples of plan provisions that satisfy certain specific requirements of the Internal Revenue Code... Note that these CODA LRMs assume the plan will permit catch-up contributions (defined in Code Section 414(v)) for participants age 50 and over and Roth Elective Deferrals (defined in Section 402A)." [Also online: 45-page red-lined version showing changes from the previous (October 2011) version.] (Internal Revenue Service [IRS])
Year-End Compliance Issues for Single-Employer Retirement Plans (PDF)
"This [article] looks at key areas -- including administrative compliance issues -- that sponsors of such defined benefit or defined contribution plans should address by Dec. 31, 2017." (Milliman)
IRS Issues Model Amendments for Bifurcated Distribution Options (PDF)
"Plan sponsors may limit the extent that bifurcation is available with respect to a participant's accrued benefit. Other limitations may include the number of forms of distribution among which an accrued benefit may be bifurcated or the combinations of forms of distribution that are made available. The model amendments include language that allow for these limitations." (Prudential)
IRS Clarifies Use of Effective Date Addendums to Pre-Approved 403(b) Plan Documents
"Adoption of the pre-approved document itself may not take into account plan provisions that were in effect at varying times during this period.... The IRS has taken the position that such plans may continue to rely on their pre-approved opinion or advisory letter if they create an 'effective date addendum' to the plan document." (Ascensus)
[Guidance Overview] When Must Discretionary Amendments to a 403(b) Plan be Adopted?
"The Remedial Amendment Period (RAP) for 403(b) plans ends on March 30, 2020 for plan sponsors using IRS pre-approved 403(b) plan documents.... [W]hat happens if a plan sponsor changed the operation of the plan but did not adopt an amendment reflecting that change? ... The answer 'appears' to be that the plan can be retroactively amended when it is restated.... [T]his is one area where the rules for qualified plans differ from the rules for 403(b) plans." (FIS Relius)
[Guidance Overview] Understanding Pre-Approval of 403(b) Plans
"In March 2017, the [IRS] began issuing advisory and opinion letters to the first preapproved retirement programs described in Internal Revenue Code Section 403(b) ... [This] article discusses preapproved 403(b) plans, including their advantages, legal pitfalls, and other issues that an eligible employer may consider when determining whether to convert its existing 403(b) plan into a preapproved plan." (Venable LLP)
[Discussion] Timing of Corrective Amendment for 2016 and Going Forward for 2017
"We have a client that has allowed participants into the match portion of the plan earlier than the document allows. We are doing a corrective amendment for 2016, but can we also do a corrective amendment now for 2017? My concern is that I thought that a corrective amendment was only available after the plan year ended. Client has changed the entry conditions for match to tie to those of the deferral with an amendment effective August 1, 2017. But there is still the issue of the period from 1/1/17 to the date of amendment." (BenefitsLink Message Boards)
[Guidance Overview] IRS Preapproved Plan Program Gets a Makeover (PDF)
"Plan sponsors of individually designed plans may want to consider this guidance if they are considering moving to a pre-approved plan document. And plan sponsors who already use pre-approved plans may want to review the guidance to see what changes will be coming. Of course, these new defined contribution documents will not be available for a few more years." (Groom Law Group, via TAXES The Tax Magazine)
IRS Modifies Preapproved Retirement Plan Program
"The modifications are designed to further the IRS's stated intention to encourage sponsors of individually designed plans to transition to a preapproved plan format. However, the changes are relatively modest and most large plan sponsors will likely find other ways to mitigate their higher compliance risk since the curtailment of the individually designed determination letter program. The IRS plans to continue enhancing and expanding the preapproved plan program 'in whole or in part, from time to time, with some of the changes based on comments from program users." (Willis Towers Watson)
[Guidance Overview] IRS Has Revised Its Qualified Plans Correction Program to Address the Determination Letter Program Changes (PDF)
"This column discusses the major changes made to the Employee Plans Compliance Resolution System (EPCRS) by Revenue Procedure 2016-51 to address the determination letter program changes.... [1] Determination letter requirement for self correction eliminated ... [2] Requirement (or ability) to apply for a determination letter as part of EPCRS eliminated ... . [3] IRS VCP fees and schedules moved ... [4] IRS audit cap sanctions revamped to address the lack of a recent determination letter ... [5] Plan amendment and plan document failures clarified." (Groom Law Group, via Journal of Pension Benefits)
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