January 7, 2016

Expiration Dates on Determination Letters Issued before January 4, 2016 No Longer Operative

In Notice 2016-03, issued January 4, 2016, the Internal Revenue Service (IRS) provided guidance on three issues related to the elimination of the five-year cycle-based determination letter program, which was first announced early in 2015 (See Announcement 2015-19):

  • Expiration dates included in determination letters that were issued prior to January 4, 2016 are no longer operative. Letters issued on or after that date will no longer include expirations dates.    
  • Controlled groups and affiliated service groups whose members have different Employee Identification Numbers (EINs) and who sponsor separate plans may make a “Cycle A election” for the upcoming Cycle A (which opens February 1, 2016) and submit determination letter requests for all plans in the group in that Cycle, but only if the group had made a Cycle A election for the last Cycle A by January 31, 2012 (the last day of the last Cycle A).
  • Employers have an additional year -- until April 30, 2017 (not April 30, 2016) -- to adopt a current pre-approved defined contribution (DC) plan and apply for a determination letter under the pre-approved plan rules, provided that the newly adopted pre-approved plan is not a modification and restatement of a prior pre-approved plan maintained by the employer.

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