The IRS today released an advance version of Announcement 2018-5 concerning the issuance of IRS defined benefit opinion letters and IRS advisory letters for pre-approved defined benefit plans for the second six-year cycle.
Announcement 2018-5 [PDF 45 KB] reports that the IRS intends to issue opinion and advisory letters for pre-approved master and prototype (M&P) and volume submitter (VS) defined benefit plans that were:
The release also states that the IRS expects to issue the opinion and advisory letters on March 30, 2018—or as soon as possible after that date in some instance.
An employer using these pre-approved plan documents to restate a plan for the plan qualification requirements included on the 2012 Cumulative List will be required to adopt the plan document by April 30, 2020.
Today’s IRS announcement extends to April 30, 2020, the end of a pre-approved defined benefit plan’s remedial amendment cycle with respect to the changes in plan qualification requirements included on the 2012 Cumulative List. An adopting employer whose defined benefit plan is eligible for the six-year remedial amendment cycle system under Rev. Proc. 2016-37, and who adopts, by April 30, 2020, an M&P or VS defined benefit plan that was approved based on the 2012 Cumulative List, will be considered to have adopted the plan within the second six-year remedial amendment cycle.
Starting May 1, 2018, and ending April 30, 2020, the IRS will accept an application for an individual determination letter from an employer eligible to submit a determination letter request under the second six-year remedial amendment cycle for defined benefit pre-approved plans.
Rev. Proc. 2018-4 (previously published in IRB 2018-1 [PDF 936 KB]) provides guidance on when an adopter of an M&P or VS plan may submit a determination letter application.
Today’s release states that the IRS will announce in future guidance a delayed beginning date for the third six-year remedial amendment cycle for pre-approved defined benefit plans.
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.