Determination Letter Cutoffs
Rev. 01/19/10; E-mail Alert 2010-1

GUST Preapproved DB Determination Letter Program Closing February 22, 2010
The IRS has announced the temporary closing of its determination letter program for pre-approved defined benefit plans filed on a Form 5307 effective February 22, 2010.  Announcement 2009-85 states the temporary suspension of this program will allow the IRS time to prepare for receiving Form 5307 applications for restated EGTRRA plans.  The IRS expects to announce the timing of the approximate two-year program for restating preapproved defined benefit plans soon.

This announcement does not affect Form 5307 determination letter submissions for pre-approved defined benefit and defined contribution plans filing voluntary correction program (VCP) or Audit CAP requests under the Employee Plans Compliance Resolution System (EPCRS). 

EGTRRA Preapproved DC Plan Determination Letter Program Closing April 30, 2010
Existing pre- approved EGTRRA defined contribution plans must be restated onto the EGTRRA document by April 30, 2010. The deadline for such plans to file for a determination letter using Form 5307 is also April 30, 2010.   With the end of the pre-approved EGTRRA DC plan restatement period, the IRS was hinting that it might not accept any further Form 5307s for EGTRRA DC plans. 

However, a prohibition on submitting Form 5307 could have numerous unintended consequences.  For example, brand-new preapproved DC plans adopted by employers after April 30, 2010 may be unable to be submitted for a DL on their EGTRRA document using Form 5307. Additionally, individually designed Cycle E plans that execute a Form 8905 and restate onto a pre-approved plan after April 30, 2010, but before the end of their RAP cycle also may be prohibited form using Form 5307 for an EGTRRA DL letter. Having brought these issues to the IRS’ attention, it is hoped that the IRS may address them in its upcoming update to the Rev. Proc. 2007-44 addressing the 5 and 6-year staggered cycles.