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Compliance July 6, 2017
IRS Makes Effort to Encourage Use of Pre-Approved Plans
The agency has made changes to its opinion letter program for pre-approved retirement plans.
Reported by Rebecca Moore
The Internal Revenue Service (IRS) has issued Revenue Procedure 2017-41, which sets forth the procedures for issuing opinion letters regarding the qualification in form of pre-approved plans under Sections 401, 403(a), and 4975(e)(7) of the Internal Revenue Code.
In addition, the revenue procedure modifies the IRS pre-approved letter program by combining the master and prototype (M&P) and volume submitter (VS) programs into a new opinion letter program. It also modifies the on-cycle submission period for the third six-year remedial amendment cycle for providers of pre-approved defined contribution (DC) plans so that it begins on October 2, 2017, and ends on October 1, 2018.
The IRS says it is modifying its historic approach to pre-approved plans in order to expand the provider market and encourage employers that currently maintain individually designed plans to convert to the pre-approved format.
In addition to the program being simplified by eliminating the distinction between M&P and VS plans, the program is liberalized by increasing the types of plans eligible for pre-approved status, the IRS says. The program is revised to afford greater flexibility in the design of pre-approved plans.