Reductions in IRS Determination Letter Program
In late July, the IRS announced significant modifications to its determination letter program for employee benefit plans. Key changes include:
- As of July 21, 2015 (and effective through December 31, 2016), no off-cycle determination letter applications are accepted, except for certain new plans and terminating plans.
- As of January 1, 2017, 5-year, staggered amendment cycles for individually designed plans will be eliminated. Determination letters will only be issued at plan inception and termination.
There is a transition rule applicable to plans currently on the 5-year amendment cycle. The IRS has also announced a request for comments regarding these changes that may be submitted until October 1, 2015. For further details, see http://www.irs.gov/pub/irs-drop/a-15-19.pdf.