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IRS Intends to Issue Opinion Letters for Pre-Approved Defined Benefit Plans for the Third Six-Year Remedial Amendment Cycle
Practical Law Legal Update w-038-4640 (Approx. 3 pages)
IRS Intends to Issue Opinion Letters for Pre-Approved Defined Benefit Plans for the Third Six-Year Remedial Amendment Cycle
by Practical Law Employee Benefits & Executive Compensation
| Published on 08 Feb 2023 • USA (National/Federal) |
On February 8, 2023, in Announcement 2023-6, the Internal Revenue Service (IRS) announced that it intends to issue opinion letters on February 28, 2023, for pre-approved defined benefit plans that were filed with the IRS for the third six-year remedial amendment cycle. The Announcement also discusses an extension of the deadline to adopt certain pre-approved defined benefit plans. The IRS announced the opening of the determination letter program for adopting employers of certain pre-approved defined benefit plans.
On February 8, 2023, in Announcement 2023-6, the IRS announced that it intends to issue opinion letters for pre-approved defined benefit plans that were:
- Restated for changes in plan qualification requirements listed in the 2020 Cumulative List (see Legal Update, IRS Issues 2020 Cumulative List in Notice 2020-14).
- Filed with the IRS for the third six-year remedial amendment cycle under Rev. Proc. 2016-37 (see Legal Update, IRS Provides Determination Letter Guidance in Revenue Procedure 2016-37).
The IRS expects to issue the opinion letters on February 28, 2023, or in some cases, as soon as possible afterward.
Announcement 2023-6 also provides that:
- The end of the third six-year remedial amendment cycle for pre-approved defined benefits plans is extended to March 31, 2025 (from January 31, 2025).
- An adopting employer whose defined benefit plan is eligible for the six-year remedial amendment cycle that adopts a newly approved plan on or before March 31, 2025, will be considered to have adopted the plan within the third six-year remedial amendment cycle.
- An employer adopting a pre-approved defined benefit plan may apply for an individual determination letter (if eligible) during the period beginning April 1, 2023, and ending March 31, 2025.
For more information on pre-approved plans, see Practice Note, Pre-Approved Plans: Design Choices, Tax-Qualification Rules, and Best Practices.