State:
Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Cost Per Hire Calculator
This handy calculator lets you plug in your expenses for recruiting, benefits, salaries, and more.

Graphs automatically generate to show you your annual cost per hire and a breakdown of where you are spending the most money.

Download Now!
April 16, 2018
IRS May Expand Determination Letters for Some Retirement Plans

By Jane Meacham, Contributing Editor

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

The Internal Revenue Service (IRS) said on April 5 that it may reopen its determination letter program to certain types of individually designed retirement plans, beyond the narrow set of circumstances in which such letters are currently available.

retirement plansIn Notice 2018-24, the IRS is soliciting comments on what specific types of plans it should consider accepting for determination letters in 2019.

In 2016, the IRS announced that it would stop making routine qualification determinations of individually designed retirement plans under its previous 5-year remedial amendment cycle program. The goal was to best use reduced agency resources by encouraging plan sponsors to adopt master and prototype (M&P) and volume submitter (VS) plans, which the agency combined into one preapproved plan program in 2017. (See, Restated Preapproved DB Plans Learn from DC IRS Amendment Cycle.)

Since the end of its Cycle A on January 31, 2017, the IRS now only makes determinations on individually designed plans for initial plan qualification, for qualification upon plan termination, and in some other limited circumstances that the IRS has described in published guidance. However, the agency also has said it will consider annually whether to open up the determination letter program to certain types of individually designed plans in other situations.

“Circumstances for consideration include, for example, significant law changes, new approaches to plan design, and the inability of certain types of plans to convert to pre-approved plan documents,” the notice said.

“Comments that suggest expanding the scope of the program for a particular type of plan should not merely state the type of plan but should also specify the issues applicable to that type of plan that would justify review of that particular plan type under the determination letter program. Such issues may include specific plan features and special plan designs applicable to that type of plan, or unresolved questions of qualification in form with respect to that type of plan,” the notice continued.

Comments to the IRS are due by June 4, with the notice providing submission instructions. It does not state when the IRS might announce guidance, if it decides to expand the scope of the determination letter program.

Jane Meacham is the editor of BLR's retirement plan compliance publications. She has nearly 30 years' experience as a writer/editor of financial services news.

Featured Free Resource:
Cost Per Hire Calculator
Twitter  Facebook  Linked In
Follow Us
HCMNPWS1
Copyright © 2024 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on https://Compensation.BLR.com
Document URL: https://compensation.blr.com/Compensation-news/Retirement-Planning/Employee-Retirement/IRS-May-Expand-Determination-Letters-for-Some-Reti