February 1, 2011 marked the opening of Cycle A of the five-year IRS determination letter cycle for individually designed qualified retirement plans. The period, or Cycle, during which an individually designed plan must be filed is determined based on the last digit of the plan sponsor's employer identification number (EIN). If a plan sponsor's EIN ends in a 1 or 6, an application for a determination letter must be filed no later than January 31, 2012.

In addition, Cycle A provides a unique opportunity for members of a controlled group to apply at the same time even if the members have EINs that would place them in different determination letter Cycles. Members of a controlled group may jointly elect to apply for a determination letter ­during the same Cycle. If this election is made, all plans must be submitted during Cycle A. Alternatively, if a controlled group is a parent-subsidiary controlled group, the parent may elect to apply for a determination letter during the period ­corresponding to the last digit of the parent's EIN. The parent-subsidiary controlled group election must be made by the parent and must be made prior to the end of the earliest determination letter Cycle during which any member of the parent-subsidiary controlled group could be filed.

Comment: For those plan sponsors that applied for a determination letter during the Cycle A ending on January 1, 2007, this is the first opportunity to seek approval of changes to plan designs that reflect the Pension Protection Act of 2006 and subsequent legislation, including the qualified automatic contribution arrangement safe-harbor design under section 401(k)(13) of the Code.

If a controlled group intends to make an election to apply together during Cycle A, that election must be made by each member of the controlled group and submitted with the determination letter application. Such an election concentrates the required work to one Cycle, thereby permitting members of a controlled group together to review their retirement plan designs and how they fit into the overall compensation and benefit structure of the control group while at the same time updating the retirement plans for legal requirements.

Groups of tax-exempt organizations that form a "control group" may apply together as discussed above. A group of tax-exempt organizations that do not form a "control group" may also elect to apply together for determination letters based on the EIN of the centralized organization responsible for the administration of all qualified plans sponsored by the members of a group of tax- exempt organizations that are "related" if: (1) the tax-exempt organizations are not a controlled group or affiliated service group, (2) the terms of the plans sponsored by the tax-exempt organizations are ­substantially similar and (3) all or substantially all of the ­discretionary authority concerning plan administration and operation is handled by a centralized organization. The election is also available for a taxable entity that is related to the tax-exempt organizations so long as the terms of the plans sponsored by the taxable entity are substantially the same as the plans sponsored by the tax-exempt entity.

Comment: Applying for a determination letter and/or making an election to file as a group requires advanced planning. A plan sponsor should determine whether it must file during the current Cycle so that it may begin the process of updating and restating its plan document. In addition, controlled group and tax-exempt organization elections must be made during the earliest Cycle during which any of the plans may be filed. For many, the earliest Cycle may be Cycle A.