[13688]
June 29, 2001
TO: PENSION COMMITTEE No. 43-01
RE: IRS SIMPLIFIES PLAN DETERMINATION LETTER PROCEDURES
The Internal Revenue Service recently released Announcement 2001-77, which simplifies
the procedures for determination letters on the qualification of pension, profit-sharing, stock
bonus and annuity plans under sections 401(a) and 403(a). Announcement 2001-77 gives plan
sponsors the flexibility to request a determination letter that considers either the form of the
plan only or both the form of the plan and compliance with the requirements of sections
401(a)(4), 401(a)(26) and 410(b). The plan determination letter procedures are also being
modified to facilitate plan compliance with new final regulations on the use of cross-testing in
the application of the nondiscrimination requirements of section 401(a)(4).
Specifically, the Service is:
• Giving plan sponsors the option to request determination letters without furnishing
information on how plans satisfy the nondiscrimination requirements of section
401(a)(4), the additional participation requirements of section 401(a)(26) or the
minimum coverage requirements of section 410(b);
• Allowing adopting employers of nonstandardized master and prototype plans
(M&P) or certain volume submitter plans to rely on a favorable opinion letter or
advisory letter with respect to most qualification requirements without requesting a
determination letter;
• Allowing an employer maintaining a multiple employer plan to rely on a favorable
determination letter for the plan with respect to most qualification requirements
without submitting a separate Form 5300;
• Encouraging practitioners to highlight the changes to plans that have previously
received favorable determination letters;
• Making available and updating periodically a list of the M&P plan and volume
submitter specimen plans that were submitted to the Service for GUST advisory and
opinion letter by December 31, 2000 and indicating the dates on which opinion and
advisory letters were issued or the applications were withdrawn;
• Allowing practitioners to amend volume submitter specimen plans to reflect the
recently published final regulations on cross-testing; and
• Allowing plan sponsors to request determination letters that take into account the
final regulations on cross-testing, beginning August 22, 2001.
2Plan sponsors may rely on Announcement 2001-77 until the Service publishes the
changes as modifications to Revenue Procedures 2000-20, 2001-6 and 2001-8.
A copy of Announcement 2001-77 is attached.
Kathryn A. Ricard
Associate Counsel
Attachment
Attachment (in .pdf format)