News & Information

 

FEATURED PRODUCT

5500 Preparer's Manual for 2012 Plan Years

5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.

CCH® PENSION — 01/26/12

Numerous changes have been made to and by determination letter procedures

The IRS has issued revised procedures for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans (ESOPs), and the status for exemption of any related trusts or custodial accounts. The revised procedures are effective February 1, 2012 for plans under the five-year remedial amendment cycle (other than terminating plans), and May 1, 2012 for terminating plans and for plans under the six-year remedial amendment cycle.

Revisions have been made throughout the revenue procedure that incorporate the changes made to the determination letter program in IRS Announcement 2011-82. The changes to the determination letter filing procedures eliminate elective demonstrations concerning minimum participation, coverage, and nondiscrimination requirements and provide that only employers that have made limited modifications to a pre-approved volume submitter plan may file Form 5307 (Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans).

In the section concerning the general scope of determination letters, the IRS provides that a plan will not be reviewed for, and a determination letter does not constitute a ruling or determination as to, whether the plan is a governmental plan under Code Sec. 414(d) or a church plan under Code Sec. 414(e). The section on the general procedures for requesting determination letters is clarified to provide that an applicant must include EPCRS documentation, if any, with an application and that, where the submitted plan is the result of a merger between two or more plans, certain documentation must be provided for each of the underlying plans. The section relating to when determination letters are issued has been revised to clarify the circumstances under which a determination letter can be requested and to provide that an application should include all interim and other plan amendments adopted since the submission of the most recent determination letter application.

The section of the revenue procedure on employer reliance on master and prototype (M&P) plans and volume submitter (VS) plans makes modifications to IRS Rev. Proc. 2011-49 for determination letter applications filed on or after May 1, 2012. These modifications include that certain adopting employers may not apply for a determination letter on Form 5307 and that, with certain exceptions, an application for a determination letter for an M&P or VS plan that is filed on Form 5300 (Application for Determination for Employee Benefit Plan) is treated as an application for an individually designed plan. Thus, the plan must be restated to take into account the Cumulative List in effect when the application is filed.

Source: IRS Rev. Proc. 2012-6.

For more information, visit http://www.wolterskluwerlb.com/rbcs.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

Visit our News Library to read more news stories.