The IRS is now accepting applications for opinion letters for pre-approved defined contribution (DC) plans for the third six-year remedial amendment cycle.
The IRS says that for it to consider a third cycle application, a pre-approved DC plan provider must verify compliance with the second cycle’s requirements by doing the following:
1. stating that an opinion or advisory letter wasn’t requested for the DC preapproved plan for a prior cycle or at any prior time;
2. attaching the plan’s most recent opinion or advisory letter for the second six-year remedial amendment cycle; or
3. including a satisfactory explanation of why an opinion or advisory letter wasn’t requested during the second six-year remedial amendment cycle and how employers that adopted the plan satisfied the second cycle’s qualification requirements in a timely manner.
If a pre-approved DC plan provider received an opinion letter for the first six-year remedial amendment cycle but didn’t secure one for the second, the IRS says it will not issue the plan’s opinion letter for the third cycle unless the DC pre-approved plan provider satisfactorily explains: (1) why an opinion or advisory letter wasn’t requested during the second cycle; and (2) how employers that adopted the plan satisfied the second cycle’s qualification requirements on time.
If a pre-approved DC plan provider is not able to satisfy one of the three conditions, the IRS says it must correct the qualification failure under the Voluntary Correction Program before it applies for the third cycle’s opinion letter.
The IRS says that for it to consider a third cycle application, a pre-approved DC plan provider must verify compliance with the second cycle’s requirements by doing the following:
1. stating that an opinion or advisory letter wasn’t requested for the DC preapproved plan for a prior cycle or at any prior time;
2. attaching the plan’s most recent opinion or advisory letter for the second six-year remedial amendment cycle; or
3. including a satisfactory explanation of why an opinion or advisory letter wasn’t requested during the second six-year remedial amendment cycle and how employers that adopted the plan satisfied the second cycle’s qualification requirements in a timely manner.
If a pre-approved DC plan provider received an opinion letter for the first six-year remedial amendment cycle but didn’t secure one for the second, the IRS says it will not issue the plan’s opinion letter for the third cycle unless the DC pre-approved plan provider satisfactorily explains: (1) why an opinion or advisory letter wasn’t requested during the second cycle; and (2) how employers that adopted the plan satisfied the second cycle’s qualification requirements on time.
If a pre-approved DC plan provider is not able to satisfy one of the three conditions, the IRS says it must correct the qualification failure under the Voluntary Correction Program before it applies for the third cycle’s opinion letter.
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