Under the IRS’s determination-letter program, all individually designed plans (i.e., those that are notmaintained on a prototype or volume submitter document) are on a five-year cycle for renewing their determination letters. Plans in “Cycle E” could begin filing their second round of determination-letter applications on February 1, 2015. The deadline for filing those applications is January 31, 2016.

Two main categories of plans fall within Cycle E.

  • All individually designed plans that are sponsored by employers whose employer identification number ends with either “5” or “0,” and
  • All “governmental plans,” as defined in Section 414(d) of the Tax Code, that elected to file in Cycle E – rather than Cycle C – for this second round of applications. Governmental plan sponsors who elected to file in Cycle E must now (1) amend their plans for all applicable items on the second Cycle E “Cumulative List,” and (2) timely adopt any interim amendments required for governmental plans during the second Cycles C and D.

As we remind plan sponsors every year, although this Cycle E filing deadline may seem a long way off, keep in mind that several steps must be completed in order to meet the deadline. In addition to the actual application, a determination-letter filing now requires a complete restatement of the plan document. At a minimum, all amendments adopted since the plan’s prior restatement must be incorporated into the plan document, which must then be formally approved, signed, and dated on behalf of the sponsor.

In addition, this restatement must reflect all of the relevant changes listed on the “2014 Cumulative List of Changes in Plan Qualification Requirements,” as set forth in IRS Notice 2014-77. It will take some time to review the plan document against this extensive list, and then make the necessary revisions. Moreover, the IRS has repeatedly advised sponsors that applications filed early in a cycle will receive a more prompt response.

If a Cycle E plan fails to file a determination-letter application by the January 2016 deadline, the plan’s existing determination letter will become obsolete. This could be a problem if the IRS were to audit the plan and determine that any of its provisions fail to comply with any Tax Code requirements.

Given the importance of meeting the January 2016 filing deadline – as well as the effort involved in reviewing and restating each plan document – sponsors of Cycle E plans would be well-advised to initiate this restatement and application process without delay.