Recent Changes to the IRS Determination Letter Program
Kelley Drye Client Advisory
Effective January 1, 2017, except for the last batch of Cycle A filers who were permitted to submit determination letters by January 31, 2017 (i.e., filers with an EIN ending in 1 or 6), the IRS will no longer accept determination letter applications from employers maintaining individually designed retirement plans (except when a plan is first established or terminated or upon certain other circumstances to be considered by the IRS from time to time). Employers who have a current determination letter may continue to rely on it with respect to plan provisions that have not been amended or otherwise affected by a change in applicable law since the letter was issued, without regard to the expiration date contained in the letter.
To assist employers in ensuring that their retirement plans remain qualified, the Department of the Treasury and the IRS will issue a “Required Amendments List” and an “Operational Compliance List” on an annual basis to identify changes to the plan qualification requirements and to aid employers in achieving operational compliance with such changes as they become effective but before the deadline for adopting a required amendment expires.
Given the elimination of the determination letter program for on-going plans, we understand that many employers might be anxious about maintaining their qualified plan documents. As we have in the past, Kelley Drye will continue to monitor all developments affecting plan qualification requirements, including those identified on the annual Required Amendments List or Operational Compliance List, and may contact you regarding any such developments that might impact your retirement plans. At your direction, our employee benefits attorneys will carefully review the documentation and operation of your retirement plans and assist you in determining whether any amendments to, or changes in the way you operate, your retirement plans are necessary.
As always, our employee benefits attorneys are available to answer any questions you may have regarding your retirement plan’s qualification under the Internal Revenue Code.