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Ret plans - amendments required, incl. EGTRRA

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[Discussion] PPA Restatement and Plan Termination After Dissolution of Plan Sponsor
"Let's say the plan was a one-person profit sharing plan. The sponsor was the sole participant's medical professional association. The participant died in 2014. The plan provides that the plan terminates upon dissolution of the plan sponsor. I believe the P.A. might have been dissolved in 2013. The plan never was formally terminated or paid out. Would the plan need a PPA restatement?" (BenefitsLink Message Boards)
IRS Paves the Way for More Preapproved Plans
"A pre-approved plan may have either of two formats: an adoption agreement and basic plan document or a single plan document; a money purchase pension plan can now be combined with either a 401(k) or profit-sharing plan; an ESOP can now include a 401(k) feature, but it must be a nonstandardized plan; a Cash Balance plan may now provide that the rate used to determine an interest credit be based on the actual return on plan assets (not a subset of plan assets), but it must be a nonstandardized plan[.]" (Findley Davies | BPS&M)
[Guidance Overview] IRS Updates the Pre-Approved Plan Document Program
"The most significant change outlined in [Rev. Proc. 2017-41] is the restructuring of the M&P and VS programs into a single Opinion Letter program with two types of plan documents: Standardized and Nonstandardized. This change eliminates the distinctions between M&P and VS plans and expands the Nonstandardized Plan program to allow for greater flexibility in plan features and options (in effect, Nonstandardized plans will fill the role traditionally filled by VS documents)." (FIS Relius)
[Guidance Overview] IRS Makes Major Changes to Qualified Pre-Approved Plan Program
"Nonstandardized plans may be customized, within IRS limits, without becoming individually designed plans.... The program now includes nonelecting church plans. A nonstandardized plan may allow hardship distributions of elective deferrals for non-safe harbor reasons. The IRS will no longer review and approve a plan's trust or custodial agreement and will require that the trust agreement or custodial account agreement be in a document separate from the plan." (Ascensus)
[Guidance Overview] IRS Revises Opinion Letter Procedures for Pre-Approved Plans, Issues 2017 Cumulative List
"The M&P Plan and VS Plan programs are combined and replaced by a single opinion letter program for standardized plans and nonstandardized plans ... A pre-approved plan may have one of two formats: as an adoption agreement plan or a single document plan ... An adopting employer of a nonstandardized plan may adopt minor modifications to the plan ... A money purchase plan may be combined with a 401(k) plan or a profit-sharing plan in the same pre-approved plan document.... A nonstandardized plan that contains an employee stock ownership plan (ESOP) may include a 401(k) plan ... A cash balance plan may now permit the rate used to determine an interest credit to be based on the actual return on plan assets." (Thomson Reuters Practical Law)
[Discussion] Using Remedial Amendment Period for a 403(b) Document from 2001
"Rev. Proc. 2017-18 provides that the RAP begins on 1/1/2010 and ends on 3/31/2020, so a 403(b) plan sponsor can adopt a prototype or VS plan by 3/31/2020 retroactive to 1/1/2010 and fix any issues in an old plan document. The sponsor must adopt a written plan document 'intended to satisfy the section 403(b) requirements' before 1/1/2010. Announcement 2009-89 says the document must satisfy the requirements of 'the regulations' (which did not come out until 2007). My client's latest document was signed in 2001. Can the client qualify for the 3/31/2020 RAP if it restates the 2001 document retroactive to 1/1/2010?" (BenefitsLink Message Boards)
IRS Overhauls Opinion Letter Process for Pre-Approved Plans, Combines Prototype and Volume Submitter Programs
"The overhaul of the pre-approved plan program is not surprising given the IRS's significant reduction of the determination letter program for individually designed plans ... Comments are specifically requested regarding the possibility of allowing adopting employers to continue to maintain certain 'legacy' benefit formulas (such as frozen or continuing benefit formulas for certain participants due to a merger or acquisition) when adopting a pre-approved plan." (Thomson Reuters / EBIA)
[Official Guidance] Text of IRS Notice 2017-37: Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Contribution Plans for 2017 (PDF)
11 pages. "This notice contains the Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Contribution Plans for 2017 ... Cumulative Lists identify changes in the qualification requirements of the Internal Revenue Code that are required to be taken into account in a pre-approved plan document submitted under the pre-approved plan program administered by the [IRS] and that will be considered by the IRS for purposes of issuing opinion letters. The 2017 Cumulative List is to be used to submit opinion letter applications for pre-approved defined contribution plans during the third six-year remedial amendment cycle, which began February 1, 2017, and ends January 31, 2023 ... Defined contribution plans may be submitted for approval during the on-cycle submission period, which begins October 1, 2017, and ends October 1, 2018." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Rev. Proc. 2017-41: Changes to Opinion Letter Program for Pre-Approved Retirement Plans (PDF)
"This revenue procedure sets forth [procedures] for issuing Opinion Letters regarding the qualification in form of Pre-approved Plans under Sections 401, 403(a), and 4975(e)(7) of the Internal Revenue Code [and combines] the master and prototype (M&P) and volume submitter (VS) programs into a new Opinion Letter program. [It also] modifies and supersedes, in part, Rev. Proc. 2015-36 ... and modifies Rev. Proc. 2017-4 ... and Rev. Proc. 2016-37[.] [It also] modifies the on-cycle submission period for the third six-year remedial amendment cycle for Providers of pre-approved defined contribution plans so that it begins on October 2, 2017 and ends on October 1, 2018. [It also] modifies the IRS's historic approach to Pre-approved Plans in order to expand the Provider market and encourage employers that currently maintain individually designed plans to convert to the pre-approved format." (Internal Revenue Service [IRS])
Adopting a New Pre-Approved 403(b) Document? It's a Good Time for a Plan Compliance Review (PDF)
"[P]lan sponsors will need to take care that they choose a pre-approved document that can accommodate their plan design, and, once they select an appropriate document, that all of the plan's provisions are correctly restated on the new document.... [The authors] have compiled [a] high level list of provisions that bear scrutiny. This is not a complete list, but it highlights some common areas where the operation of the plan may not be consistent with the terms of the document or with applicable law[.]" (Boutwell Fay LLP)
[Guidance Overview] Changes to Puerto Rico's Tax Code and Trust Act Could Impact HCEs
"The Act sets the threshold for HCEs to $150,000 (currently $120,000 in the U.S., and previously the threshold under P.R. law). This HCE threshold is fixed, while the U.S. threshold is subject to cost-of-living adjustments.... Limits on per-participant contributions to defined contribution plans are currently the same under both the P.R. and U.S. tax codes: the lesser of 100% of compensation or $54,000. The Act limits contributions to the lesser of 25% of 'net income' or $75,000." (Willis Towers Watson)
[Guidance Overview] Recent Legislation Impacts Puerto Rico Tax-Qualified Retirement Plans
"[S]ome of the main changes adopted by the Act include ... New maximum on contributions ... New definition of Highly Compensated Employee (HCE) ... New safe harbor for Cash or Deferred Arrangement (CODA) Plans ... Although the Act was effective immediately and, technically speaking, requires Puerto Rico qualified plans to adopt amendments incorporating its provisions ... PR Treasury officials informally instructed [practitioners] ... to wait before adopting and implementing the Act until PR Treasury examines the scope of the new qualification requirements and issues guidance regarding their implementation." (McConnell Valdes)
Protecting Your Qualified Retirement Plan Now That the IRS Determination Program Is (Mostly) Closed
"[A] more practical solution is to continue the discipline forced by the old determination program and use that discipline for systematic reviews of ongoing compliance. This does not mean constant full-scale review, but rather setting up a system to ensure that key elements of the plan document and administration will be reviewed periodically[.]" (Proskauer's ERISA Practice Center)
[Official Guidance] Text of IRS Memo for EP Rulings and Agreements Staff: Changes in Tax Exempt Quality Management System (TEGMS) and Mandatory Review Standards (PDF)
"Effective May 1, 2017, ... the following applications are subject to mandatory review: [1] Cases with interested party comments.... [2] Terminations with reversions of more than $5,000,000; and two percent of all other terminations. [3] Technical advice requests.... [4] Proposed adverse determination cases.... [5] Variable annuity plans. [6] Cases designated by a Determinations Manager, Determinations Area Manager or the Manager, EP Ruling & Agreements QA." [TE/GE-07-0417-0018, Apr. 28, 2017] (Internal Revenue Service [IRS])
[Guidance Overview] Puerto Rico Modifies Requirements for Qualified Retirement Plans
"Several of the modifications create new disparities between rules under the Puerto Rico and U.S. tax codes, such as those for identifying highly compensated employees (HCEs) for nondiscrimination testing, which could complicate plan administration. The act, by its terms, takes effect immediately although Hacienda (the Puerto Rico Treasury Department) will need to address how the changes apply in various situations, such as when determining HCE status for purposes of 2017 testing and where the nominal effective date is other than the start of a plan year." (Willis Towers Watson)
[Official Guidance] Adopters of Pre-Approved Defined Contribution Plans Get One-Day Deadline Extension
"The IRS has extended the deadline from Sunday, April 30, 2017, to Monday, May 1, 2017, for certain employers to adopt a defined contribution pre-approved plan and apply for a determination letter, if permissible. Notice 2016-03 previously extended the deadline from April 30, 2016, to April 30, 2017, to help employers who wanted to convert their existing individually designed plan into a current defined contribution pre-approved plan based on the 2010 Cumulative List." (Internal Revenue Service [IRS])
[Guidance Overview] Puerto Rico Legislation May Require Changes to Retirement Plans
"Act No. 9-2017 revises a number of Puerto Rico qualified retirement plan rules including contribution limits, rules related to nondiscrimination testing and employer deductions for retirement plan contributions. Questions remain about how and when to implement these changes, but the 2017 Act became effective immediate upon enactment, so plan sponsors should be prepared for the possibility of mid-year 2017 changes to their retirement plans." (National Law Review)
[Official Guidance] Text of IRS Request for Comments on Revisions to Form 5300: Determination for Employee Benefit Plans
"[T]he IRS is soliciting comments concerning Form 5300, Application for Determination for Employee Benefit Plans.... Form 5300 is used to request a determination letter from the IRS for the qualification of a defined benefit or a defined contribution plan and the exempt status of any related trust ... There are revisions being made to the form at this time." (Internal Revenue Service [IRS])
[Guidance Overview] Deadline for Plan Sponsors to Submit Qualification Amendments with the Puerto Rico Treasury Is Fast Approaching
"[P]lan sponsors or participating employers using the calendar year as the tax year that have adopted 'qualification amendments' during 2016, must submit such amendments with the Puerto Rico Treasury on or before April 15, 2017 ... The term 'qualification amendment' is limited to the [certain] modifications[.]" (Littler)
[Guidance Overview] IRS Issues Guidance to Correct Defective 403(b) Plans
"[A]mendments must be retroactive to January 1, 2010, so a correction could cover a lot of years. If a plan was administered based on a defective plan document, that failure would also need to be corrected retroactively using EPCRS. Employers will need to collect information from 2010 forward as to what amendments have been made to the 403(b) plan and when, as well as to whether operation was consistent with those plan terms." (Ice Miller LLP)
[Guidance Overview] Avoid Overpaying User Fees for Your VCP Submission
"The Employee Plans Voluntary Compliance function (VC) has noticed an increase in submissions with incorrect user fees. Many of these submissions include user fees higher than what is required.... Plan sponsors need to refer to Rev. Proc. 2017-4, Appendix A.08 to determine the appropriate VCP user fees for submissions made in 2017. As of February 1, 2016, we lowered the user fees for many types of 401(a) and 403(b) plan VCP submissions. Only use the 2016 version of Form 8951 (Rev. Sept. 2016), Compliance Fee for Application for Voluntary Correction Program (VCP), to determine specific user fee amounts; don't use the pre-2016 versions of this form as they contain inaccurate information." (Internal Revenue Service [IRS])
[Guidance Overview] The 2017 Operational Compliance List
"For 2017, the Operational Compliance List includes ... [1] QNECs and QMACs in defined contribution plans ... [2] Extension of temporary nondiscrimination relief for closed defined benefit pension plans ... [3] Partial annuity distribution options for defined benefit pension plans ... [4] Cash balance/hybrid plans final regulations." (Findley Davies | BPS&M)
Qualified Retirement Plans in 2017 and Beyond: Resources and Considerations for Employers
"The Required Amendments List is not exhaustive ... Operational compliance may be required prior to plan amendment ... Reliance on existing determination letters is limited." (Caplin & Drysdale)
[Guidance Overview] Using the New IRS Remedial Amendment Period Rules (PDF)
28 pages. "To properly consider the consequences of this effective elimination of the type of determination letter program ... it is important to understand when qualified retirement plans may be amended retroactively.... [If] an employer or other plan sponsor has unlimited ability to retroactively amend a plan, it becomes relatively unimportant whether the IRS will issue a determination letter saying the form of the plan appears consistent with the Tax Code requirements for qualified retirement plans." (Utz & Lattan, LLC)
[Official Guidance] Text of IRS Operational Compliance List, Calendar Years 2016 and 2017
"The Operational Compliance List is provided per Rev. Proc. 2016-37, Section 10, to help plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements effective during a calendar year.... Effective in 2017: [1] Proposed Regulations regarding QNECs and QMACs in defined contribution plans ... [2] Extension of temporary nondiscrimination relief for closed defined benefit pension plans ... [3] Final regulations regarding partial annuity distribution options for defined benefit pension plans ... [4] Final regulations regarding cash balance/hybrid plans ... [5] Application of benefit restrictions for certain defined benefit plans." (Internal Revenue Service [IRS])
[Guidance Overview] IRS Fact Sheet: How to Self-Correct Defective 403(b) Plan Provisions During the Remedial Amendment Period
"During the [remedial amendment period], sponsors of both 403(b) pre-approved plans and 403(b) individually designed plans are eligible to correct plan provisions that fail to meet IRC Section 403(b) requirements (including those under the 403(b) regulations and subsequent guidance) either by: Adopting a 403(b) pre-approved plan by March 31, 2020, that has a 2017 opinion or advisory letter; [or] Amending their individually designed plan by March 31, 2020." (Internal Revenue Service [IRS])
[Guidance Overview] New Determination Letter Procedures for Puerto Rico Retirement Plans
"Unlike the IRS, Hacienda is not restricting determination letters to establishing and terminating a qualified retirement plan (and a few other special circumstances). Hacienda continues to require sponsors to file determination letters for many types of plan amendments, and sponsors may seek determination letters for other amendments as well. All new plans must obtain a determination letter from Hacienda to become qualified." (Willis Towers Watson)
[Guidance Overview] Puerto Rico Treasury Updates Rules for Obtaining Retirement Plan Qualification Letters (PDF)
"Previously ... plan sponsors and other service providers would have had to submit all plan document restatements and amendments for a qualification letter. Now, under CL 16-08, plan restatements and/or amendments that do not contain 'Qualification Amendments' do not need to submit another application to Hacienda for a favorable determination on the qualified status of the retirement plan." (Conduent)
[Guidance Overview] Puerto Rico Modifies Requirements for Qualified Retirement Plans and Trusts
[Act No. 9-2017] amends the Trust Act to provide an enhanced protection of trust assets against creditor's claims, incorporate the concept of 'retirement plan trust' ... protect the surviving spouse of a retirement plan participant by recognizing him/her as the beneficiary of the plan's death benefits ... and reduce the uncertainty and court intervention when there is a change in trustee. The Act also amends the PR Code in an effort to ease the establishment and operation of retirement plans in Puerto Rico, particularly those established by small employers and owner-employees." (McConnell Valdes)
[Guidance Overview] IRS Announces the Last Day of the Remedial Amendment Period for 403(b) Plans
"[T]he remedial amendment period is available only if an employer adopted a written plan document intended to satisfy the requirements of Code Section 403(b) on or before January 1, 2010 or, if later, the first day of the plan's effective date.... [If] the form of a Code Section 403(b) retirement plan does not satisfy the requirements of Code Section 403(b) during the remedial amendment period but is properly retroactively amended by March 31, 2020, the plan will be considered to have satisfied the requirements for the entire remedial amendment period[.]" (Proskauer's ERISA Practice Center)
[Guidance Overview] Remedial Amendment Period for 403(b) Plans Ends March 31, 2020
"Although the IRS has not yet issued any determination letters for pre-approved 403(b) plans, it is expected that it will do so soon ... The IRS has never offered a program for individually-designed 403(b) plans to obtain determination letters that plan documents are in compliance with the 403(b) Plan Rules, and has discontinued its regular determination letter program for individually-designed qualified plans, such as pension and 401(k) plans. Accordingly, it is unlikely that plan sponsors will be able to obtain IRS approval that individually-designed 403(b) plans are in compliance with the 403(b) Plan Rules." (Kilpatrick Townsend)
[Guidance Overview] Sponsors of Pre-Approved 403(b) Plans Need to Request Opinion or Advisory Letters by March 31, 2020
"[T]he last day of the remedial amendment period for Section 403(b) plans will be March 31, 2020.... While it is unclear when they might again be permitted to file, the cycle for qualified plans is a six-year cycle. If applied to Section 403(b) plans, this would mean that there will not be another opportunity to file until about 2025 or 2026." (Venable LLP)
[Guidance Overview] IRS Provides Long-Awaited Guidance on Initial 403(b) Plan Remedial Amendment Period (PDF)
"The IRS first announced that it would be issuing guidance on the remedial amendment period for 403(b) plans in Revenue Procedure 2013-22, where it set forth the procedures for requesting and issuing opinion and advisory letters for pre-approved 403(b) plans. No such opinions or advisory letters have been issued yet, but some applicants have been informed that the review of their plans has been completed, and informal comments from IRS suggest they should start to come out in a few months." (Groom Law Group)
Window for Fixing Current 403(b) Documents to Close in 2020 (PDF)
"IRS will allow 403(b) plan sponsors until March 31, 2020 to correct document defects and/or adopt a pre-approved plan restatement ... The remedial amendment period is available only if an employer adopted a written plan intended to satisfy the 403(b) requirements on or before January 1, 2010, or the plan's effective date, if later (the first day of the plan's remedial amendment period)." (Conduent)
IRS Exempts Some Small Employer Plans from User Fee for Determination Letter Applications
"Effective January 1, 2017, the [IRS] ... said that to simplify eligibility for user-fee exemptions, an application for a determination letter related to a pension, profit-sharing, stock bonus, annuity, or employee stock ownership plan (ESOP) maintained by a small employer will be treated as being filed within a qualifying open remedial amendment period if the plan didn't exist before January 1 of the 10th calendar year before the year in which the application is filed.... Small-employer plans are defined by the IRS in the notice as having no more than 100 employees." (HR Daily Advisor)
[Guidance Overview] Puerto Rico Treasury Issues New Guidance on Rules and Procedures for Qualification of Retirement Plans
"CL 16-08 provides that qualification letters issued under the Puerto Rico Internal Revenue Code of 2011... will continue to be valid as long as the official plan document or trust agreement is not amended to add, modify, or remove (in whole or in part) any plan provision considered a 'qualification amendment,' as defined in CL 16-08.... CL 16-08 clarifies that only plan restatements and/or plan amendments that include amendments classified as 'qualification amendments' have to be submitted for qualification.... This new guidance keeps the qualification amendments of the Previous Guidance, but also adds additional types of amendments that will be considered qualification amendments." (Littler)
[Guidance Overview] Proposed Amendments to the Retirement Plan Provisions of the Puerto Rico Internal Revenue Code
"HR 3 amends the Trust Act to provide enhanced protection of trust assets, incorporate the concept of 'retirement plan trust', protect the surviving spouse of a retirement plan participant, and reduce uncertainty and litigation when there is a change in trustee. HR 3 also amends the PR Code to ease the establishment of retirement plans in Puerto Rico, particularly by small employers and owner-employees." (McConnell Valdes)
[Guidance Overview] The Birth of the First-Ever IRS Pre-Approved 403(b) Plan Documents
"[E]mployers have maintained 403(b) plans beginning in 1959, well before 401(k) plans were even a glimmer in anyone's thoughts. Employers will, for the first time need to restate their plans to reflect a 'real' plan document ... The restatement period will be a three-year period ending on March 31, 2020. The IRS plans on issuing their approval letters (opinion letters for prototype plans and advisory letters for volume submitter plans) on the plans that have been submitted by March 31, 2017. Once the letters are issued, employers can start restating their plans." (National Tax-Deferred Savings Association [NTSA])
[Guidance Overview] IRS Relaxes Rules on Use of Forfeitures to Fund Safe Harbor Contributions
"[To] apply these changes, plan documents will need to be amended to remove the language that restricts the use of forfeitures to fund safe harbor contributions.... Since this change is discretionary, an amendment would need to be adopted by the last day of the plan year to which it applies. In addition, an earlier amendment might be needed to avoid violating the anti-cutback rules (IRC Section 411(d)(6)) depending on how forfeitures are handled under a plan sponsor's current plan." (FIS Relius)
[Guidance Overview] Correcting 'Best Guesses' on 403(b) Plan Terms by Using the First Remedial Amendment Period Under Rev. Proc. 2017-18
"Considering there have been generations of administrators and vendor staffs which have used a variety of different methods to operate 403(b) plans, [implementing the 2007 plan document requirement] was bound to be a difficult one. And it has been.... 403(b) written plan documents needed to be adopted by January 1, 2010 ... If you timely adopted a plan document (or adopted a new one since January 1, 2010), the terms of that document are unlikely to comply with what we think the rules are, given what we have found through the pre-approval process[.]" (Business of Benefits)
[Official Guidance] Text of IRS Rev. Proc. 2017-04: Consolidated and Revised Procedures for Employee Plans Determination Letters and Letter Rulings
"Notable changes to Rev. Proc. 2016-4, Rev. Proc. 2016-6 and Rev. Proc. 2016-8 that appear in this year's update and consolidation include: [1] Procedures for requesting determination letters were modified to reflect the elimination of the 5-year remedial amendment cycles for individually designed plans and other changes as described in section 4 of Rev. Proc. 2016-37.... Procedures for requesting determination letters were modified to reflect that employers may request determination letters on whether covered employees are leased employees only to the extent the employer is otherwise eligible to apply for a determination letter under Rev. Proc. 2016-37.... [2] Procedures for requesting determination letters were modified to reflect that employers that maintain individually designed plans may no longer request determination letters on whether a plan sponsor is part of an affiliated service group ... [3] Procedures for requesting a minimum funding waiver, as described in section 3 of Rev. Proc. 2004-15 have been modified ... [4] Procedures for requesting determination letters were modified to reflect that determination letters on partial terminations issued to individually designed plans will be limited in scope to whether a partial termination has occurred, unless the employer is otherwise eligible to apply for a determination letter under Rev. Proc. 2016-37." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Rev. Proc. 2017-18: Last Day of Remedial Amendment Period for 403(b) Plans (PDF)
"This revenue procedure provides that the last day of the remedial amendment period for Section 403(b) plans, for purposes of section 21 of Rev. Proc. 2013-22 ... is March 31, 2020. The selection of the last day of the remedial amendment period for Section 403(b) plans was reserved in section 21 of Rev. Proc. 2013-22 (setting forth the procedures for issuing opinion and advisory letters for Section 403(b) pre-approved plans)." (Internal Revenue Service [IRS])
[Guidance Overview] PR Treasury Issues New Rules and Procedures for Qualification of Retirement Plans
"Circular Letter of Tax Policy (CLTP) 16-08 repeals and leaves without effect most of the guidance provided by Circular Letters of Internal Revenue No. 11-10 of December 16, 2011 and No. 13-02 of May 28, 2013, except certain rules regarding the qualification of retirement plans covering Puerto Rico employees on January 1, 2011.... CLTP 16-08 provides a new list of Qualification Amendments that will require a plan to seek for a new qualification letter.... The application for a qualification letter must now include [certain] additional items of information: ... CLTP 16-08 changes the deadline to request qualification letters." (McConnell Valdes)
Are Individually Designed Retirement Plans an Endangered Species?
"As a result of the IRS' changes to its determination letter program, [plan sponsors should]: [1] Ensure that an annual review is performed for all retirement plans to confirm compliance with the IRS' Required Amendment List and Operational Compliance List. Document the annual review in the plan administrator minutes; amend the plans as required, and conduct operational audits to document your diligence.... [2] Carefully scrutinize all proposed amendments to the plan for potential issues. You will no longer be able to clean up problematic language during the determination letter process.... [3] Consider whether a pre-approved plan can satisfy the plan's design and legal requirements." (Vorys, Sater, Seymour and Pease LLP)
Qualified Retirement Plans in 2017 and Beyond: Resources and Considerations for Employers
"The Required Amendments List is not exhaustive ... Operational compliance may be required prior to plan amendment ... Reliance on existing Determination Letters is limited ... Preserve the version of the plan document for which the most recent determination letter was issued, so that any subsequent amendments can be clearly identified; Weigh stylistic revisions to the plan document (whether via amendment or restatement) against their potential impact on reliance; and Consider the desired reliance on the existing plan document when drafting future amendments, e.g., in assessing which sections to amend and how best to do so." (Caplin & Drysdale)
[Official Guidance] Text of Instructions for IRS Form 5300: Application for Determination for Employee Benefit Plan (PDF)
Revised Jan. 2017; dated Dec. 13, 2016. "The form and instructions have undergone major revisions in format and information required.... Many of the revisions reflect the changes affecting individually designed plans described in Rev. Proc. 2016-37 ... including [1] eliminating 5-year remedial amendment cycles, and [2] generally limiting determination letter (DL) requests to initial plan qualification and qualification on plan termination, effective January 1, 2017. In addition, sponsors may submit requests for determinations on partial termination regardless of their ability to request DLs on their plan document. Many other changes are intended to reduce burdens on filers." (Internal Revenue Service [IRS])
[Official Guidance] IRS Updates Determination Letter Instructions for DB Plans with Risk Transfer Language
"Applicants requesting determination letters for [DB] plans should identify whether the plan has lump sum risk transfer language in either the cover letter to their application or an attachment. For plans that do, also identify the appropriate plan section and whether the plan satisfies one of the conditions in Notice 2015-49. For DB plan applications we've already received, we'll request the plan sponsor to inform us of this information." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Notice 2017-01: Eligibility for Exemption from User Fee Requirement for Employee Plans Determination Letter Applications Filed on or After January 1, 2017 (PDF)
"[In] light of changes to the remedial amendment period rules set forth in Rev. Proc. 2016-37 ... the IRS will treat an application for a determination letter as being filed within a qualifying open remedial amendment period if the plan was first in existence no earlier than January 1 of the tenth calendar year preceding the year in which the application is filed (the 'ten-year rule').... [An] application that satisfies the requirements for the user fee exemption in Section 7528(b)(2)(B), but that does not meet the requirements for the ten-year rule ... may be filed without a user fee. However, the application must include a statement describing how the application satisfies the exemption under Section 7528(b)(2)(B)." (Internal Revenue Service [IRS])
[Guidance Overview] Making a List and Checking it Twice: IRS Issues the 2016 Required Amendments List
"There are no changes in qualification requirements first effective in 2016 that generally require an amendment to most plans or most plans of a certain type by December 31, 2018.... Collectively-Bargained Defined Benefit Plans ... must be amended by December 31, 2018, to incorporate restrictions on accelerated distributions from underfunded single-employer plans in employer bankruptcy under Code Section 436." (Drinker Biddle)
[Guidance Overview] Puerto Rico Plans 2016 Plan Amendments and Compulsory Determination Letter Filings (PDF)
"[T]here are no PR Code statutory changes in 2016 that must be reflected in Puerto Rico Plans documents.... Puerto Rico Plan design changes contemplated for the 2017 plan year that would reduce future benefits may need to be adopted before the start of the 2017 plan year." (Groom Law Group)
[Opinion] ERIC Works to Alleviate Burden for Large Employers After Loss of Determination Letter Program
"ERIC urged the agencies to: [1] Allow plan sponsors to incorporate, by reference, a number of legally required provisions; [2] Enable plan sponsors to omit from their governing documents provisions that do not apply to their plans due to the status of the plan sponsor or the design of the plan; and [3] Adopt a flexible approach to the existence of plan form defects discovered during an audit." (The ERISA Industry Committee [ERIC])
[Opinion] American Benefits Council Comments to IRS on Facilitating Compliance with Qualified Plan Document Requirements
"Because multiple employer plans provide many of the same efficiencies as pre-approved plans, multiple employer plans should be eligible for determination letters.... [P]rivate letter rulings (PLRs) should be issued with respect to certain plan qualification issues.... [In many] cases, such as large mergers and acquisitions, there is a real need for the greater reliance achieved through the determination process. Legally, an opinion letter does not provide the same level of reliance as a determination letter." (American Benefits Council)
[Official Guidance] Text of IRS Form 5300: Application for Determination for Employee Benefit Plan (PDF)
Rev. January 2017. "Review instructions and the Procedural Requirements Checklist before completing this application. Submit all required attachments." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Notice 2016-80: 2016 Required Amendments List for Qualified Retirement Plans (PDF)
5 pages. "This notice contains the Required Amendments List for 2016 (2016 RA List).... [T]his notice provides that December 31, 2018 is 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 2016 RA List.... December 31, 2018 is also the plan amendment deadline for a disqualifying provision arising as a result of a change in qualification requirements that appears on the 2016 RA List. However, a later date may apply to a governmental plan[.]" (Internal Revenue Service [IRS])
[Official Guidance] Forms 8950 and 14568-B: Additional IRS Instructions for VCP Submissions Beginning January 1, 2017
"Until we update Forms 8950 and 14568-B, follow these additional instructions for each form: ... Because some parts of the 9/2015 version of [Form 8950] don't match the new revenue procedure and contain old references, follow the 9/2015 version instructions, [except for certain specified items] ... Because the 8/2016 version of [Form 14568-B] contains some language that refers to the submission of proposed corrective amendments, be sure to: [1] Include copies of signed and dated corrective amendments including restated plan documents.... [2] Ignore language on the form that permits the submission of proposed corrective amendments." (Internal Revenue Service [IRS])
Law Firm to Offer Opinion Letters on Tax-Qualified Status of Plan Documents in Response to Change in IRS Program
"The [IRS] has largely ended its determination letter program by which sponsors of individually designed retirement plans can obtain confirmation that their plan documents are tax-qualified.... Effective January 1, 2017, the IRS will issue determination letters only when a plan is initially established or terminated.... In response to the void created by the IRS, Ballard Spahr has developed a new Retirement Plan Opinion Letter Program. Under the Program, Ballard Spahr will review an individually designed retirement plan document (and any amendments) and issue an opinion letter regarding the plan document's tax-qualified status. For most plan sponsors, we anticipate providing our new service on an annual basis (for a flat fee) to address qualification requirements as they are updated each year." (Ballard Spahr LLP)
Qualified Retirement Plan Amendments and IRS Filings (PDF)
"Although it appears that for most plans no such amendments are required in 2016 ... [if] you have made any discretionary amendments, you should take some time to make sure they have been formally adopted by the end of the year. Additionally, some cash balance and hybrid plans may still need to be amended by December 31, 2016, to comply with previously issued IRS guidance regarding market rates of return and other IRS guidance." (Alston & Bird LLP)
[Guidance Overview] Text of IRS Publication 794: Favorable Determination Letter (PDF)
4 pages; revised Nov. 2016. "This publication explains the significance of a favorable determination letter, points out some features that may affect the qualified status of an employee retirement plan and nullify the determination letter without specific notice from us, and provides general information on the reporting requirements for the plan." (Internal Revenue Service [IRS])
[Guidance Overview] Updates to the Employee Plans Compliance Resolution System
"While Revenue Procedure 2016-51 is a useful update to EPCRS in light of the changes made over the past few years, it generally leaves the correction principles untouched. Given the curtailment of the IRS's determination letter program, we might see additional changes to EPCRS (e.g., expand the availability of self-correction under certain circumstances)." (Trucker Huss)
[Guidance Overview] The 'Missive Gap': Employers to Cope Without Updated Plan IRS Determination Letters (PDF)
"[T]he new normal for [individually designed plans (IDPs)] will likely be extensive periods of plan life between initial plan adoption and plan termination in which plan sponsors will need to rely upon their judgment and that of their counsel and other plan advisors with respect to their compliance with new IRS plan document maintenance requirements. Some of the newly announced features provide employers some comfort, but the reality is that the maintenance of an IDP plan document in the future will likely entail inherently more employer risk and exposure than it has in the past." (Jackson Lewis P.C.)

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