The IRS published a reminder to employers with pre-approved Master and Prototype or Volume Submitter retirement plans of the April 30, 2010 deadline to restate their plan onto an EGTRRA-approved plan document and, if applicable, submit an application for a determination letter with the IRS.
Employers that have a plan provided by a bank, brokerage firm, insurance company, or other financial institution likely have a pre-approved plan. Employers using pre-approved plans are entitled to use the six-year remedial amendment cycle provided in Revenue Procedure 2007-44. The deadline for adopting and filing EGTRRA restatements for pre-approved defined contribution plans is April 30, 2010.
IRS Filing Requirements
Employers are not required to obtain a determination letter from the IRS, but there are several advantages to doing so. Where an employer adopts a pre-approved plan it may be entitled to rely on the opinion letter of the pre-approved plan sponsor. However, reliance on the opinion letter of the pre-approved plan sponsor is permitted only in a limited set of circumstances. Employers that have added provisions to an adoption agreement or plan likely cannot rely on the opinion letter of the pre-approved plan sponsor and should file for their own determination letter. Accordingly, employers should either file an application for a determination letter with the IRS or confirm they may rely on the opinion letter of the pre-approved plan sponsor.
Employers using the six-year remedial amendment cycle should confirm their plan has been restated using an EGTRRA-approved plan document that is properly signed and dated on or before April 30, 2010. Employers should contact counsel to file an application for a determination letter or, if desired, to determine whether they may rely on the opinion letter of the pre-approved plan sponsor.
If you have any questions about the issues raised in this alert, please contact the author of this article.