FAQs on Withdrawing Cycle C Applications
Announcement 2014-4 extends the deadline to submit applications for opinion and advisory letters for pre-approved defined benefit plans’ second six-year remedial amendment cycle in order to to allow time for the IRS to develop a pre-approved program for plans with cash balance features.
- May a plan sponsor who signs a Form 8905 under Announcement 2014-4 intending to adopt a pre-approved cash balance plan subsequently adopt an individually designed plan without losing reliance?
Yes, a plan sponsor who originally intended to adopt a pre-approved cash balance plan may later adopt an individually designed cash balance plan as long as the plan sponsor adopts the individually designed plan within the two-year window for pre-approved defined benefit plans, which will be announced in future guidance (see Revenue Procedure 2007-44, Section 19.03(1)).
- May a Cycle C plan sponsor who submitted an application for an individually designed cash balance plan during the second Cycle C remedial amendment cycle that ended January 31, 2014, sign Form 8905, withdraw its pending application, and receive a refund of the user fee paid?
Yes, a Cycle C plan sponsor who timely submitted an application for an individually designed cash balance plan during the second Cycle C remedial amendment cycle that ended on January 31, 2014, may withdraw the application and request a refund of the user fee, provided the plan sponsor signs Form 8905 by March 31, 2014. The plan sponsor should request the withdrawal and user fee refund in writing postmarked (or faxed) by May 31, 2014. The request must include the name of the plan sponsor, plan number, EIN, and the document locator number, if known. That number is identified on the letter the IRS sends to acknowledge receipt of the application.
The request must also state in bold letters: “Per Announcement 2014-4, we are withdrawing this application in order to submit under the pre-approved program.”
Mail requests to:
Internal Revenue Service
550 Main Street
Cincinnati, OH 45202
Attn: Joyce Heinbuch
Fax requests to Ms. Heinbuch at (513) 263-4699 (not a toll-free call).
- Do the special withdrawal procedures for Cycle C filers described above apply to other cycle filers who submitted determination letter applications for individually designed cash balance plans?
No. The special relief for withdrawing pending applications applies only to Cycle C plan sponsors whose remedial amendment cycle ended January 31, 2014. Other plan sponsors who submitted individually designed cash balance plans in prior cycles (for example, sponsors in Cycle A and Cycle B) who withdraw their applications under the normal determination letter application withdrawal procedures (Section 6.17 of Revenue Procedure 2014-6) will not receive a refund of their user fees and will lose reliance on their current favorable determination letters (if any). In addition, if such plan sponsors withdraw their applications now, they will lose the benefit of having the extended remedial amendment period that results from the filing of a timely submitted determination letter request (see section 1.401(b)-1(e)(3) of the Income Tax Regulations).