Remedial Amendment Procedure |
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September 15, 2005 |
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| The IRS has issued Revenue Procedure 2005-66, which revises the restatement process (allegedly, forever). The procedure is the culmination of many efforts, including a study of the remedial amendment process, two White Papers, practitioner involvement, and comments on a draft procedure. IRS Restatement Procedure Finalized After two White Papers, committee meetings with industry leaders, a draft procedure and comments on the development of a new and on-going restatement process, the IRS released Revenue Procedure 2005-66 finalizing the determination letter process…for now. The procedure addresses the five-year cycle for individually designed plans and the six-year cycle for pre-approved plans, such as master and prototype documents and volume submitter plans. The IRS has extended the EGTRRA Remedial Amendment period for all pre-approved plans until the end of the first cycle. For defined contribution plans the date is January 31, 2011, while for defined benefit plans the date is January 31, 2013. For individually designed plans, the last day of the first cycle for cycle A plans is January 31, 2007; cycle B plans is January 31, 2008, etc. For individually designed plans, which cycle an employer falls into depends upon the last digit of their taxpayer identification number. Employers whose numbers end in 1 or 6 are in Cycle A, 2 or 7 Cycle B, 3 or 8 Cycle C and so on. |
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| 1. | Interim amendments . Plan qualification requirement changes (since the last approved document) resulting from either new laws or new regulations will likely require the adoption of an interim amendment. The interim amendment must be timely adopted. If the interim amendment does not meet the qualification requirements, the plan will have until the end of the remedial amendment cycle to make a remedial amendment. | |
| 2. | Qualification Requirements . In addition to the items on Cumulative List of Changes in Plan Qualification Requirements List, the Service will consider all qualification requirements in effect before the issuance of the Cumulative Lists when processing opinion, advisory or determination letter requests. The first list was issued last December in 2004 in Notice 2004-84. | |
| 3. | January 31, 2006 Deadline . The IRS deadline for mass-submitter sponsors, practitioners and national sponsors as well as word-for-word adopters and minor modifiers is extended to January 31, 2006. This will allow the incorporation of the Final Roth 401(k) Regulations. |
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| 4. | Multiemployer and Multiple Employer Plans . The five-year cycle to be used by Multiemployer Plans is Cycle D, while Multiple Employer Plans have been assigned Cycle B. |
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