The Internal Revenue Service (IRS) has released subject matter packages that Employee Plans Specialists use when reviewing retirement plan documents.
Plan sponsors can also use these packages as a review tool before submitting a determination letter application to the IRS. Plans in Cycle E submit determination letter applications for their plans beginning February 1, 2015, through January 31, 2016.
Each subject matter—such as minimum vesting standards, required plan distributions and Section 401(k) requirements—is packaged as a publication and two forms. Not all packages are relevant to all plans.
Each package contains:
- An Explanation that provides guidance in the law and legal citations;
- Alert Guidelines (worksheets) you can use to review retirement plans. Generally, a “yes” answer to a question indicates a plan is in compliance with applicable law; and
- Plan Deficiency Paragraphs (checksheets) that are pre-approved wording that, if used by plan sponsors, will satisfy the applicable Internal Revenue Code requirements. While you aren’t required to use this exact wording, the pre-approved language provides an easy and reliable method for assuring plan qualification.
The packages may be accessed here.The IRS has also provided determination letter review procedures that apply to Form 5300, Form 5310 and Form 5316 retirement plan determination letter applications received on or after February 1, 2015, starting with the second Cycle E. Form 5307 applications will continue to be reviewed under Cycle D2 procedures until the second six-year remedial amendment cycle for pre-approved defined benefit plans.