Determination, Opinion and Advisory Letter for Retirement Plans – Staggered Remedial Amendment Cycles

 

Alert: Revenue Procedure 2016-37 eliminated the 5-year remedial amendment cycle for individually designed plans, effective January 1, 2017. See New Determination Program Rev. Proc. 2016-37. However, third Cycle A filers are permitted to submit determination letter applications on or before January 31, 2017.

The following information on cycles for individually designed plans is only applicable for determination letter applications submitted before February 1, 2017.


Cycles for individually designed plans

Prior to February 1, 2017, sponsors of individually designed plans submitted applications for determination letters once every five years, under a staggered system of 5-year cycles (Cycles A - E). Revenue Procedure 2007-44 describes this system of remedial amendment cycles.

Generally, the cycle that applied to an individually designed plan depended on the last digit of the sponsoring employer's identification number (EIN). Some exceptions applied in determining an individually designed plan’s cycle - see the chart below for details. The submission period for individually designed plans was generally the last year of their cycle.

5-year remedial amendment cycle – chart of cycle dates for individually designed plans

Cycles for new individually designed plans

Revenue Procedure 2007-44 provides details on the remedial amendment period that applied to new individually designed plans, including rules extending the remedial amendment period to the end of the next applicable cycle if the remedial amendment period would be cut short due to the cycle submission date. See sections 5.03 and 14.04.

Plan amendments between cycles

Although individually designed plans were submitted for determination letters once every five years, and the IRS only considered changes as noted in the applicable Cumulative List in its review, sponsors were required to timely adopt interim and/or discretionary amendments. See section 5 of Revenue Procedure 2007-44 for discussion of these rules, and special deadlines for governmental and tax-exempt employers.

Cumulative List

Revenue Procedure 2007-44, section 4, provides details on the plan qualification requirements the IRS considered in its review of applications with respect to a particular Cumulative List. Except as otherwise provided on the applicable Cumulative List, the IRS did not consider in its review any:

  • guidance issued or statutes enacted after the October 1 preceding the date the applicable Cumulative List was issued
  • qualification requirements that became effective in a calendar year after the calendar year in which the submission period began
  • statutes first effective in the year in which the submission period begins where there is no guidance

Off-cycle filing

Effective July 21, 2015, the IRS will no longer accept off-cycle determination letter applications except determination letter applications for:

  • new plans (Rev. Proc. 2007-44, section 14.02(2)), and
  • terminating plans.

See Rev. Proc. 2016-6 and Revenue Procedure 2016-37.

Cycles for pre-approved plans

The pre-approved plan 6-year remedial amendment cycles will continue (see Part III of Revenue Procedure 2016-37). A separate 6-year cycle applies to pre-approved plans. The IRS considers certain plan qualification requirements in its review of applications, as provided on the applicable Cumulative List for a plan's cycle. See the 6-year remedial amendment cycle for pre-approved plans and due dates for adopting employers.

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