When was the plan first in existence?
To be eligible for the exemption, you must file your determination letter application before the later of the:
- fifth plan year the plan is in existence; or
- end of any remedial amendment period for the plan that begins in its first five plan years.
Note: If the plan was established because of a plan spin-off or merger, then the plan will be treated as in existence on the first day the plan from which it was spun-off was in effect, or the earliest date any of the merged plans was in effect.
Notice 2011-86 treats an eligible employer’s determination letter application as having been filed by the last day of the plan’s remedial amendment period beginning within the first five plan years if the:
- application is filed after January 31, 2011,
- application is filed during the plan’s current remedial amendment cycle, and
- plan was first in effect no earlier than January 1 of the tenth calendar year before the year in which the current remedial amendment cycle’s submission period begins.
Plans meeting these conditions are exempt from the determination letter application user fees.
A determination letter application filed by an eligible employer for a defined benefit plan eligible for the 6-year remedial amendment cycle ending on April 30, 2012, is exempt from the determination letter application user fees if the:
- application is filed no later than April 30, 2012, and
- plan was first in effect no earlier than January 3, 1996.
Is the employer an “eligible employer?”
To qualify for the exemption, an employer must:
- Have 100 or fewer employees receiving at least $5,000 in compensation for the calendar year immediately preceding the one in which the determination letter request is filed.
- Treat all members of a controlled group, partnership or affiliated service group as a single employer and considers leased employees as employees when figuring total employees.
Note: If the plan is maintained by more than one employer, then each of those employers must be an “eligible employer.”
In the plan year preceding the one in which the determination letter request is filed, did you have at least one non-highly compensated plan participant?
To qualify for the exemption you must have had at least one non-highly compensated employee participating in the plan in the year prior to the year you file your application (if the application is filed in the plan's first plan year, the requirement applies to that plan year). A non-highly compensated employee is an employee who isn’t a highly compensated employee (see IRC section §414(q)).
If you meet the user fee exemption, remember to sign and date the certification on the Form 8717, User Fee for Employee Plan Determination, Opinion and Advisory Letter Request. If your plan is not eligible for the user fee exemption, you must submit the correct fee or your package will be returned.