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Employee Plans News - Cycle A Controlled Group Election

Cycle A, which opened on February 1, 2011, contains an exception allowing plan sponsors to file a determination application using a controlled group election. Generally, the last digit of the plan sponsor’s EIN determines the 5-year remedial amendment cycle for the plan. However, all plan sponsors who are members of a controlled group or affiliated service group may elect Cycle A as their remedial amendment cycle regardless of the last digit of their EIN.

Non parent-subsidiary controlled group - the Cycle A election must:

  • be made by all members sponsoring qualified plans;

  • list the names and EINs of all eligible members;

  • contain the original election, copies of any additional elections executed by new members and an updated list with current information on any new determination letter applications; and

  • be made by any new member within one year of joining the controlled group in order for other members to maintain the existing election.

Parent-subsidiary controlled group - the Cycle A election must:

  • be made by all members of the controlled or affiliated service group (the parent company may elect for all members); and

  • include the names and EINs of all eligible members.

The parent may also include a designation in its Cycle A election that:

  • the election will also apply to the plans of future acquired subsidiaries eligible to make the election; and

  • will not apply to subsidiaries’ plans that, in the future, are no longer in the controlled group.

If the parent includes this designation, then the parent must attach the original Cycle A election along with a copy of any additional elections executed by new members and an updated list with current information each time it files a determination letter application.

Alternatively, if there is more than one plan maintained by a parent-subsidiary controlled group, the parent may elect that the remedial amendment cycle for each plan (other than a multiemployer, multiple employer, governmental or single employer collectively-bargained plan) be based on the last digit of the parent’s EIN.

All controlled groups must:

  • explain the Cycle A controlled group election in the determination letter application’s cover letter and list all plan names & their EINs;

  • have its members elect their cycle by the end of the earliest cycle (determined as of the date of their election) for which a determination letter application would be required to be submitted (or by the end of Cycle A, in the case of an election to choose Cycle A). For example, if one controlled group member is in Cycle B and another controlled group member is in Cycle C, members must choose a cycle by the last day of Cycle A.
Page Last Reviewed or Updated: 29-Oct-2013