McKay Hochman - Commentary

Charts

Remedial Amendment Cycles
March 14, 2008

SIX-YEAR CYCLE FOR PRE-APPROVED PLANS
(Master and Prototype Plans and Volume Submitter Plans)

Year

Defined contribution (DC) Plan

Year

Defined Benefit (DB) Plan

One
2005

All pre-approved DC plans must be updated/submitted to IRS by 01/31/06. List of plans submitted by 01/31/06

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Two
2006

IRS processes the applications for DC plans.

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Three
2007

IRS processes the applications for DC plans.

One
2007

Pre-approved DB plans re-written and submitted to IRS by 01/31/08.

Four
2008

IRS issues opinion letters and announces the deadline for employer to restate. Employers start restate DC plans.

415 amendment

Two
2008

IRS processes the applications for DB plans.

Five
2009

Employers’ restatement continues for DC plans. PPA Amendment due.

Three
2009

IRS processes the applications for DB plans and announces restatement deadline.

Six
2010

Employers’ complete DC restatement. (Exact date to complete the amendment process to be announced.)

Four
2010

Employers restate DB plans.

New Cycle

Year One
2011

Remedial Amendment Cycle ends 01/ 31/11.

Next round submitted from 02/01/11 to 10/31/11, 01/31/12.

Five
2011

Employers must complete restatement of DB plans by the IRS announced deadline.

Two
2012

IRS processes the applications for DC plans.

Six
2012

Remedial Amendment Deadline for all DB Pre-approved plans is 01/31/13.

Next round to be submitted from 02/01/13 to 10/31/13,01/31/14.

A new single date deadline, applicable to all adopting employers of all M&P and volume submitter plans, will be announced by the IRS – for DC plans -- in early 2008 (and replaces the old 12th-month rule). Good faith interim amendments needed based on on-going IRS guidance or new laws, for example, the Pension Protection Act amendment.

Employers who are not currently using a pre-approved plan but who wish to adopt one before the end of their plan’s RAP may do so by certifying their intent to so adopt such a plan on a Form 8905. For example, if an individually designed plan has a RAP ending January 31, 2009, the employer may certify its intent to adopt a pre-approved plan by that date. The effect of the certification is that the employer will have until the end of the pre-approved plan’s RAP (sometime in 2010, exact date not yet announced) to adopt that plan.

FIVE-YEAR CYCLE FOR INDIVIDUALLY DESIGNED PLANS

Cycle

Last Digit of EIN Number,
and Other Plans

Year to Be Restated,
By Deadline Date

1 or 6

2006,
By January 31, 2007

2 or 7,
and Multiple Employer Plans

2007,
By January 31, 2008

3 or 8

2008,
By January 31, 2009

4 or 9,
and Multiemployer Plans

2009,
By January 31, 2010

5 or 0

2010,
By January 31, 2011

The cycle provides that plans with employer identification numbers (EINs) ending in 1 or 6 must be restated in the first year (2006), and restated again in 2011. EINs ending in 2 or 7 would be restated in the second year (2007), and again in 2012, and so forth. Note that one of the two ending numbers will always coincide with the last digit of that calendar year. Also, each year’s deadline is actually January 31 of the following year. Thus, plans that must be submitted in 2008 actually have a deadline of January 31, 2009.

Although plans will not need to be amended in interim years, depending on the circumstances and to assure interim compliance, the IRS intends to issue model amendments similar to those issued for EGTRRA and the 401(a)(9) Required Minimum Distribution that may be adopted by individually designed plans.

Form 8905 was created for individually designed plans to certify their intent to change to a prototype.

Rev. Proc. 2007-44

IRS Staggered RAP Webpage

Bill Grossman, QPA

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