IRS Adds Hybrid, Merged Plans to Determination Letter Program

IRS Adds Hybrid, Merged Plans to Determination Letter Program

Internal Revenue Service

The IRS has expanded (Rev. Proc. 2019-20) its retirement plan determination letter program to allow plan sponsors to submit determination letter applications for individually designed statutory hybrid plans and for some merged plans. Rev. Proc. 2019-20 provides that the IRS will accept determination letter applications for statutory hybrid plans for a year beginning September 1, 2019, and individually designed merged plans on an ongoing basis. A plan sponsor still may submit a determination letter application for initial plan qualification and for qualification upon plan termination. The guidance also provides for a limited extension of the remedial amendment period under <a href="/research/federal/usc26/401#cpmb-0000242" resolve="/lr/resolve//cpmb#cpmb-0000242">section 401(b)</a> and <a href="/lr/resolve//dps8">Rev. Proc. 2016-37</a> under specified circumstances, and for special sanction structures that apply to some plan document failures discovered by the IRS during the review of a plan submitted for a determination letter under Rev. Proc. 2019-20. The IRS’s review of the statutory hybrid plans that are submitted for a determination letter will be based on the 2017 required amendments list (<a href="/lr/resolve//1xd4q">Notice 2017-72</a>) and will also consider pre-2016 required amendments lists and cumulative lists. The IRS’s review of merged plans will be based on the required amendments list that was issued during the second full calendar year preceding the submission of the determination letter application. The review will also consider all previously issued required amendments lists and cumulative lists. Treasury and the IRS will continue to consider comments on additional situations in which the submission of a determination letter application may be appropriate. Rev. Proc. 2019-20 amplifies and modifies <a href="/lr/resolve//dps8">Rev. Proc. 2016-37</a> and is effective September 1, 2019.

Related <a href="/lr/resolve//29ftk">IRS news release</a>.

The IRS has expanded (Rev. Proc. 2019-20) its retirement plan determination letter program to allow plan sponsors to submit determination letter applications for individually designed statutory hybrid plans and for some merged plans.

The IRS has expanded (Rev. Proc. 2019-20) its retirement plan determination letter program to allow plan sponsors to submit determination letter applications for individually designed statutory hybrid plans and for some merged plans. Rev. Proc. 2019-20 provides that the IRS will accept determination letter applications for statutory hybrid plans for a year beginning September 1, 2019, and individually designed merged plans on an ongoing basis. A plan sponsor still may submit a determination letter application for initial plan qualification and for qualification upon plan termination. The guidance also provides for a limited extension of the remedial amendment period under section 401(b) and Rev. Proc. 2016-37 under specified circumstances, and for special sanction structures that apply to some plan document failures discovered by the IRS during the review of a plan submitted for a determination letter under Rev. Proc. 2019-20. The IRS’s review of the statutory hybrid plans that are submitted for a determination letter will be based on the 2017 required amendments list (Notice 2017-72) and will also consider pre-2016 required amendments lists and cumulative lists. The IRS’s review of merged plans will be based on the required amendments list that was issued during the second full calendar year preceding the submission of the determination letter application. The review will also consider all previously issued required amendments lists and cumulative lists. Treasury and the IRS will continue to consider comments on additional situations in which the submission of a determination letter application may be appropriate. Rev. Proc. 2019-20 amplifies and modifies Rev. Proc. 2016-37 and is effective September 1, 2019.

Sec. 401 Qualified pension, profit-sharing, and stock bonus plans

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IRS Adds Hybrid, Merged Plans to Determination Letter Program