ASPPA GAC Seeks Deadline Extension for DB Pre-Approved Plans
ASPPA’s Government Affairs Committee (GAC) filed a comment letter
with the IRS on March 3, 2015, requesting an extension of the June 30 deadline for submitting the master language for pre-approved defined benefit plans. The reason for the request is the IRS’ continuing delay in releasing specimen language for cash balance plan provisions which now will be permitted in pre-approved DB plans.
ASPPA GAC was instrumental in the IRS expansion of the pre-approved plan program to include cash balance features. Previous ASPPA comment letters had recommended that cash balance plans be added to the program because of their continued popularity with plan sponsors. This addition of cash balance plans to the program is expected to result in a dramatic reduction in the number of plans that are submitted to the IRS for individual determination letters. This is a welcome change for ASPPA members who work with cash balance plans and will ultimately save plan sponsors both time and money.
Unfortunately, there has been a delay in the release of the so-called “Listing of Required Modifications” (LRMs). The LRMs set forth the wording that is used as a guide by the drafters of the master plan documents. It forms the basic building blocks of the master plans that will be used by employers to update their individual plans. The actual deadline for employer adoption will be much later (likely at least three years from now). The deadline for the submission of master plan language, however, is set much earlier in order to give the IRS time for review and other administrative chores that are part of the approval process.
The ASPPA GAC letter made the following recommendations:
- That the IRS extend the submission deadline for pre-approved DB plans to a date that is at least 5 months after the issuance of the LRMs or other IRS guidance setting forth the parameters for pre-approved cash balance plans;
- That the IRS permit integrated and non-integrated master and prototype plans to be combined into one adoption agreement; and
- That the IRS expand the volume submitter program by permitting minor modifier submissions of mass submitter plans in a manner consistent with what is permitted for master and prototype plans and for volume submitter 403(b) plans.
The comment letter was submitted on behalf of ASPPA GAC’s Plan Document Subcommittee. ASPPA GAC looks forward to discussing with the IRS the issues raised in the letter with the hope of reaching an accommodation for our concerns.
Craig P. Hoffman, APM, is ASPPA’s General Counsel and Director of Regulatory Affairs.