Compliance Corner

Retirement Updates

IRS Modifies Determination Letter Procedure

July 11, 2017

On June 30, 2017, the IRS released Rev. Proc. 2017-41, through which they announced new procedures for issuing opinion letters on the qualification of pre-approved retirement plans. Specifically, the IRS is modifying the IRS pre-approved letter program by combining the master and prototype (M&P) and the volume submitter (VS) programs into a combined opinion letter program.

In essence, the IRS is seeking to expand the provider market and to encourage employers that currently maintain individually designed plans to convert to the pre-approved format. To do this, the IRS is simplifying the program (by eliminating the distinction between M&P and VS plans), increasing the types of plans eligible for pre-approved status, and revising the program to allow for greater flexibility in the design of pre-approved plans.

Additionally, the IRS modified the on-cycle submission period for third six-year remedial amendment for providers of pre-approved defined contribution plans so that it begins on Oct. 2, 2017, and ends on Oct. 1, 2018.

This Revenue Procedure is effective Oct. 2, 2017. Employers who design their own plans should work with their advisor to determine how this change will affect them.

Rev. Proc. 2017-41 »