Determination Letter Program Expanded

In a recent Revenue Procedure (Rev. Proc. 2019-20), the IRS announced the limited expansion of the determination letter program for individually designed plans.  The program is limited to (1) certain cash balance plans and (2) retirement plans that merge as the result of a corporate transaction.  The window for determination letter submissions for eligible cash balance plans will run from September 1, 2019 to August 31, 2020.  Submissions for merged plans will begin on September 1, 2019 and will be ongoing.

This opportunity is especially important for cash balance plans since the IRS did not consider the final regulations during the last remedial amendment cycle for determination letter reviews.  These plans now have a limited opportunity to request an updated determination letter that would take into account all of the regulatory changes and required amendments through 2018.  The plans submitted for review will also be exempt from any sanction for missing amendments related to the final regulations subject to a good faith compliance effort.



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