Determination letters issued before January 4, 2016, no longer expire

Determination letters before January 4 no longer expire

The IRS today released an advance version of Notice 2016-3 providing that future guidance will be issued in anticipation of elimination of the five-year remedial amendment cycle system for “individually designed plans” under the employee plan determination program. The future guidance will update Rev. Proc. 2017-44 (providing the rules and procedures for five-year remedial amendment cycles for individually designed plans and the six-year remedial amendment / approval cycles for pre-approved plans).

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Notice 2016-3 [PDF 43 KB] states that the future guidance will provide:

  • Controlled groups and affiliated service groups that have previously made a Cycle A election will be permitted to submit determination letter applications during the Cycle A submission period beginning February 1, 2016, and ending January 31, 2017. 
  • The expiration dates on determination letters issued before January 4, 2016, are “no longer operative.” Additional guidance will clarify the extent to which a determination letter can be relied upon after a subsequent change in law or a plan amendment. 
  • The period during which certain employers may—on or after January 1, 2016—establish or adopt a defined contribution pre-approved plan and, if permissible, apply for a determination letter, is extended from April 30, 2016, to April 30, 2017. 

Today’s notice states that employers may rely on Notice 2016-3 until Rev. Proc. 2007-44 is updated to include the changes announced today.

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