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Compliance April 18, 2017
May 1 Is Deadline for New Adopters of Pre-Approved Plans
DC plan sponsors with individually designed plans can convert to a pre-approved plan now that the IRS determination letter program has ended.
Reported by PLANADVISER Staff
The Internal Revenue Service (IRS) has extended the deadline from Sunday, April 30, 2017, to Monday, May 1, 2017, for certain employers to adopt a defined contribution (DC) pre-approved plan and apply for a determination letter, if permissible.
Notice 2016-3 previously extended the deadline from April 30, 2016, to April 30, 2017, to help employers who wanted to convert their existing individually designed plan into a current defined contribution pre-approved plan based on the 2010 Cumulative List. Plan sponsors with individually designed plan documents may want to adopt a pre-approved plan since the elimination of the five-year remedial amendment cycles for individually designed plans and other changes as described in section 4 of Rev. Proc. 2016–37.
Plan sponsors are eligible for this extension if they adopt a plan after January 1, 2016, other than one that is a modification and restatement of a defined contribution pre-approved plan they maintained before January 1, 2016. The extension allows them until May 1, 2017, to:
- Adopt a current defined contribution pre-approved plan.
- Apply for a determination letter, if permissible.
If plan sponsors qualify for the extension and to file Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans (instructions), they should include a statement in the cover letter that their submission package:
- Restates the plan as a current defined contribution pre-approved plan, and
- Qualifies for the Notice 2016-3 extension.
Plan sponsors can file for a favorable determination letter until the extended May 1, 2017, deadline.
More information is here.