The IRS announced on April 5th that the agency is seeking input on whether (and how) the individually designed retirement plan determination letter program should be expanded for the 2019 calendar year. Notice 2018-24 requests stakeholder comment regarding additional situations in which sponsors of individually designed plans should have access to favorable determination letter assurance.

Currently, Rev. Proc. 2016-37 allows a plan sponsor to submit an individually designed plan determination letter application in very few circumstances: initial plan qualification, qualification upon plan termination, and upon certain “other circumstances” to be announced annually. No such additional circumstances have been announced for 2018. In deciding which “other circumstances,” if any, would merit a determination letter program expansion, the IRS is considering situations such as significant law changes, new approaches to plan design, and the difficulty (or impossibility) of converting certain individually designed plans to pre-approved plan documents. Pre-approved defined contribution and defined benefit plans sponsored by banks, TPAs, law firms and insurance companies are allowed to file for new approval letters every 6 years. Currently ESOPs and many cash balance pension plans are unable to adopt pre-approved plans, although the IRS plans to issue opinion letters for these plans as well at some future date. The availability of IRS processing resources would be a significant factor.

Comments to the IRS should include both the type of plan the commenter would have covered by an expanded program and the specific issues involving that plan design which would justify the expenditure of IRS resources.

Written comments are due to the IRS by June 4, 2018.