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IRS Updates Operational Compliance List

The IRS has updated the Operational Compliance List, its latest move to apply Revenue Procedure (Rev. Proc.) 2016-37, which changed the determination letter application program. It made the updates to the list under Section 10 of Rev. Proc. 2016-37.

Effective in 2017

The Operational Compliance List notes that the following are effective in 2017:

  • Proposed regulations regarding Qualified Nonelective Contribution (QNECs) and Qualified Matching Contributions (QMACs) in defined contribution plans under REG-131643-15;

  • Extension of temporary nondiscrimination relief for closed defined benefit pension plans under Notice 2016-57;

  • Final regulations regarding partial annuity distribution options for defined benefit pension plans under T.D. 9783;

  • Final regulations regarding cash balance/hybrid plans under T.D. 9693 and T.D. 9743; and

  • Application of benefit restrictions for certain defined benefit plans — eligible cooperative plans or eligible charity plans described in Section 104 of the Pension Protection Act of 2006.

About the List

The Operational Compliance List helps plan sponsors and practitioners achieve operational compliance by identifying changes in qualification requirements effective during a calendar year. The list identifies matters that may involve either mandatory or discretionary plan amendments depending on the particular plan and may contain other significant guidance that affects daily plan operations. The IRS makes the list available only on its webpage.

The Operational Compliance List doesn’t include annual, monthly or other periodic changes that routinely occur, such as cost-of-living increases, spot segment rates and applicable mortality tables). The IRS updates it periodically to reflect new legislation and IRS guidance. The list is not intended to be a comprehensive list of every item of IRS guidance or new legislation for a year that could affect a particular plan.

In order to be qualified, a plan must comply operationally with each relevant qualification requirement, even if the requirement is not included on the Operational Compliance List. A plan must be operated in compliance with a change in qualification requirements from the effective date of the change.