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IRS Updates 2014 Cumulative List of Changes in Plan Qualification Requirements

The IRS in Notice 2014-77 has updated the 2014 Cumulative List of Changes in Plan Qualification Requirements. The list is primarily for single-employer individually designed defined benefit plans and single-employer individually designed contribution plans that are in Cycle E to use when they submit determination letter applications for plans during the period Feb. 1, 2015-Jan. 31, 2016.

The 2014 Cumulative List provides information on issues the IRS has specifically identified for review in determining whether a plan filing in Cycle E has been properly updated.

Generally, an individually designed plan is in Cycle E if: 

  • the last digit of the employer identification number of the plan sponsor is 5 or 0; or
  • if the plan is a Code Section 414(d) governmental plan (including governmental multiemployer or governmental multiple-employer plans) for which the plan sponsor has made an election to treat Cycle E as the second remedial amendment cycle for the plan.

The 2014 Cumulative List now includes Notice 2014-66, guidance the IRS issued after Oct. 1, 2014. The notice provides a special nondiscrimination rule for a qualified defined contribution plan that provides lifetime income by offering, as investment options, a series of target date funds (TDFs) that include deferred annuities among their assets — even if some of the TDFs within the series are available only to older participants.

 

Other than that, the IRS says it will not consider any other guidance issued after Oct. 1, 2014 when it reviews any determination letter application for the submission period that begins Feb. 1, 2015. It also will not consider:

 

  • laws enacted after Oct. 1, 2014;
  • qualification requirements first effective in 2016 or later; or
  • statutory provisions that are first effective in 2015, for which there is no guidance identified in Notice 2014-77.
     

     

    And the IRS also says that in reviewing a determination letter application filed in the Cycle E submission period, it generally will not consider the 2014 final hybrid plan regulations unless:

     

    1. the plan has been amended to satisfy the 2014 final regulations; and
    2. the determination letter application indicates that a determination is requested that the plan complies with those final regulations.
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