ASPPA Makes Recommendations on IRS Priority Guidance Plan

ASPPA took the IRS up on its invitation to comment on the 2015-2016 Priority Guidance Plan and in a comment letter filed on April 30 has made suggestions to the IRS regarding projects and guidance it should pursue during the period covered by the plan.

ASPPA said that it believes that every item on the plan is important, since they would provide clarity and guidance to sponsors of retirement plans and the professionals who assist them. At the same time, ASPPA noted that it also recognizes that the IRS and the Treasury Department have limited resources and must prioritize their work on the priorities they outlined.

Accordingly, ASPPA identified what it considered the highest priorities the IRS and Treasury should pursue. These, in order of importance, are:

• determination letter program for individually designed plans (IDPs)
• mid-year changes for safe harbor plans
• QNECs and QMACs
• substantiation of hardship distributions
• governmental plans
• interim amendments
• update and expand EPCRS
• guidance regarding the aggregation rules for affiliated service groups under Internal Revenue Code Section 414(m)
• lifetime income guidance
• pre-approved plans for cash balance and employee stock ownership plans (ESOPs)
• flexibility in Internal Revenue Code Section 401(a)(26)
• merger and acquisition issues
• update Revenue Procedure 2000-40
• vesting of terminated participants
• retirement plan deadlines
• expenses included in target normal cost
• the High 25 Rule
• reduce regulatory burdens

Guidance in these areas, ASPPA said:

• will resolve significant issues relevant to many retirement plan sponsors and practitioners (not just a small group);
• will promote sound tax administration by helping plan sponsors and practitioners to maintain retirement plans in compliance with tax code qualification rules; and
• can be drafted in a manner that can be easily understood and applied by plan sponsors and practitioners.