These frequently asked questions and answers provide general information and should not be cited as any type of legal authority. They provide the user with information responsive to general inquiries. Because these answers to not apply to every situation, yours may require additional research.
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1. For Cycle C ending 1/31/09, what plan documentation requirements will the Service require for a governmental plan submitting a request for a determination letter?
The Service recognizes that governmental plans may have no single cohesive plan document available. The Service is willing to work with a plan sponsor whose plan document consists of documents from various sources and who is unable to submit a restated plan, provided that the sponsor can submit selected material in an organized manner so that Service reviewers can readily determine the applicable plan language.
Generally, the Service requires that a plan be submitted in restated form when it is submitted for a determination letter. In addition to submitting a complete copy of the plan and trust, the application should contain: (a) a copy of the timely adopted good faith EGTRRA amendments, and other required amendments or (b) for Cycle C ending 1/31/09, a summary of all of these amendments and other discretionary amendments with a certification by the sponsor that all of these amendments have been timely adopted. If amendments are summarized but not submitted, the Service may, in its discretion, request the applicant to submit all or some of the amendments for verification purposes during the Service’s review of the determination letter request. As provided in section 6.15 of Rev. Proc. 2008-6, on procedures for issuing determination letters, the Service may determine, based on the application form, the extent of review of the plan document. A failure to disclose a material fact or misrepresentation of a material fact on the application, may adversely affect the reliance that would otherwise be obtained through issuance by the Service of a favorable determination letter. This would include a failure to submit an accurate or complete summary of plan amendments, in the case of a governmental plan submission for Cycle C ending 1/31/09.
For example, the sponsor could submit a working copy of the plan (a plan submitted to the Service in a restated format to assist the Service in its review but that is not adopted in this form), along with copies of timely adopted interim and discretionary amendments or a summary of all amendments and a certification that all amendments have been timely adopted. The sponsor of a governmental plan could also submit an application that is not restated, e.g., portions of a statute applicable to the governmental plan containing general plan provisions along with other documents binding on the plan containing additional plan language, including, if necessary, details on the general language in the statute.
2. Will the Service consider allowing a governmental plan that has never received a determination letter to apply for one now, without submitting documentation for all years of the plan’s existence?
Yes. The Service verifies prior plan documentation. However, for governmental plans timely verification for GUST is sufficient.
3. What if the plan has not been timely amended and has never received a determination letter or received one a long time ago in the 1970’s?
If a plan has been timely amended, it can submit a request for a determination letter without proof of all amendments since its inception, see Q&A 2. above. However, if a plan has not made amendments timely, it should be submitted under the VCP program. See Revenue Procedure 2008-50.
4. What cycle applies to a volume submitter governmental plan?
A volume submitter governmental plan is under the six – year cycle applicable to pre-approved plans, rather than Cycle C, which applies to individually designed governmental plans. Practitioners of volume submitter plans have already submitted applications for advisory letters on these plans, and adopting employers may adopt the approved plans during the two-year window that the Service announces. Currently, the two-year window for adopting defined contribution volume submitter plans is open, as announced by the Service in Announcement 2008-23.
5. Will the Service require a redlined document as stated in Rev. Proc. 2008-6?
No. The Service will not require redlining. Rev. Proc. 2008-6 will be revised to reflect that we have eliminated the redlining requirement.
6. Will the Service require submissions every year to cover all of the pension law changes passed by state legislatures?
No. Plans are required to be timely amended for all interim and discretionary amendments, but the amendments or a summary of the amendments as described in #1.b. above, should only be submitted to the IRS when an application is made for a determination letter. For most individually designed plans, this will happen once every five years, on-cycle.
7. Are a determination letter and a private letter ruling redundant?
No. A determination letter provides reliance on the form of the plan. A private letter ruling interprets and applies the tax laws to a taxpayer’s specific set of facts but does not generally address the terms of a plan.
8. Does a governmental plan submitting for a determination letter under Cycle C need to contain provisions to comply with the final regulations under section 401(a) of the Code, published in the Federal Register on May 22, 2007 (T.D. 9325, 72 F.R. 28604) regarding permissible normal retirement ages?
No. Even though this item is listed on the 2007 Cumulative List, it is not applicable for governmental plans until plan years beginning on or after January 1, 2009. Thus, pursuant to section 4.03(3) of Rev. Proc. 2007-44 (regarding the review of requirements that are prospectively effective for a plan) the Service will not review a submission for a governmental plan for the current Cycle C period ending on 1/31/09 regarding language to comply with these regulations. However, governmental plans must comply with these regulations by the effective date and must be timely amended for these changes by the applicable interim amendment deadline.
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