Big changes are coming to the IRS’s employee plans ruling program next year. Under current procedures, sponsors of individually designed employee plans can seek a determination letter from the IRS every five years to ensure the plan is in compliance with all current laws and regulations. This helps give sponsors certainty that their plans are up-to-date and continue to meet the rules from employee plan qualification.
The IRS will generally stop ruling on amendments to individually designed plans beginning in 2017, absent special circumstances such as significant law changes and new approaches to plan design. Sponsors will only be allowed to request determination letters from the IRS on the plan’s initial qualification and upon termination. After these restrictions were first announced last year, retirement plan professionals pleaded with the IRS to backtrack on the changes, but to no avail.
Source: The Kiplinger Tax Letter, July 29, 2016