IRS extends deadline for submission of on-cycle applications for opinion and advisory letters for pre-approved DB plans

The IRS has announced that the deadline to submit on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for their second six-year remedial amendment cycle has been extended to February 2, 2015. This extension applies to defined benefit mass submitter lead and specimen plans, word-for-word identical plans, master and prototype minor modifier placeholder applications, and non-mass submitter defined benefit plans. The submission period for these applications was scheduled to expire on January 31, 2014.
Extension applies to all pre-approved DB plan submissions
The extension was made in response to requests from the employee benefits community that the IRS develop a pre-approved plan program for defined benefit plans with cash balance features that would be available for the second six-year remedial amendment cycle.

The IRS said that it intends to expand the pre-approved program to permit plans with certain cash balance features to be submitted by sponsors and practitioners as part of their pre-approved defined benefit submissions, and the submission deadline is extended to allow time for the IRS to develop the necessary language and tools to implement this expansion. However, this extension applies to all on-cycle pre-approved defined benefit plan submissions, even those that will not be modified to contain cash balance features.

In general, plans submitted in accordance with this extension will continue to be reviewed for qualification items based on the 2012 Cumulative List.

Plans with cash balance features

The IRS said that it will announce in future guidance when applications for opinion and advisory letters for pre-approved defined benefit plans with cash balance features may be submitted. Until then, however, such plans should not be submitted under the pre-approved program.

The IRS is seeking comments from interested persons on the expansion of the pre-approved defined benefit program to accommodate submissions of plans with cash balance features, including, for example, program parameters and proposals for sample plan language.

User fees

Rev. Proc. 2014-8 contains the user fees that apply for applications submitted after January 31, 2014. However, the user fees under Rev. Proc. 2013-8 will apply to pre-approved defined benefit plan applications submitted by January 31, 2014, which are not intended to contain cash balance features.

Individually designed plans

Sponsors of individually designed plans who intend to adopt a pre-approved defined benefit plan document in the future may, before the end of their applicable individually designed on-cycle deadline, complete Form 8905, Certification of Intent to Adopt a Pre-approved Plan, in lieu of submitting an application for an individually designed determination letter. The deadline for individually designed Cycle C filers to complete the Form 8905 or apply for a determination letter as an individually designed plan would normally be January 31, 2014. However, the IRS has provided that sponsors of individually designed Cycle C plans that do not intend to file a determination letter as an individually designed plan but intend to adopt a pre-approved defined benefit plan document will have until March 31, 2014 to complete Form 8905.

Source: IRS Announcement 2014-4.

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