IRS Gives Individually Designed Plans an Additional Year to Convert to Pre-Approved Plan Documents

IRS has announced in Notice 2016-03 that it will extend the deadline for an employer to restate an individually designed plan onto a current pre-approved defined contribution plan document (which is based on the 2010 Cumulative List), and to apply for a determination letter, if otherwise permissible, from April 30, 2016, to April 30, 2017. The extended deadline will also apply with respect to any defined contribution pre-approved plan that is first adopted on or after January 1, 2016.  This extension will facilitate a plan sponsor’s ability to convert an existing individually designed plan into a current defined contribution pre-approved plan.

The extension does not apply for a plan that is adopted as a modification and restatement of a defined contribution pre-approved plan that was maintained by the employer prior to January 1, 2016.  An employer that adopted a defined contribution pre-approved plan prior to January 1, 2016, continues to have until April 30, 2016 to adopt a modification and restatement of the defined contribution pre-approved plan within the current 6-year remedial amendment cycle for defined contribution plans and to apply for a determination letter, if permissible.

icon Notice 2016-03

icon 2010 Cumulative List of Changes in Plan Qualification Requirements

Author: Erwin Kratz

Erwin Kratz practices exclusively in the areas of ERISA and employee benefits law, focusing on tax and regulatory matters relating to qualified and nonqualified deferred compensation and welfare benefits.