[17399]
April 20, 2004
TO: PENSION COMMITTEE No. 21-04
PENSION OPERATIONS ADVISORY COMMITTEE No. 33-04
RE: IRS PROPOSES REGULAR SIX-YEAR AMENDMENT/APPROVAL CYCLES FOR
PROTOTYPE PLANS
The Internal Revenue Service has issued two announcements providing updates on the
status of its review of the determination letter process for qualified retirement plans.1 These
announcements describe the Service’s decision to stagger the expiration of individually
designed plans’ remedial amendment periods for the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), and a new proposal for the approval of prototype and
other pre-approved plans.2
Prototype and Other Pre-Approved Plans
In Announcement 2004-32, the Service proposes to establish regular six-year
amendment/approval cycles for all pre-approved plans, beginning with the submission of these
plans for EGTRRA opinion and advisory letters.3 In Year One, for example, all prototype
defined contribution plans would be required to be updated and submitted for approval based
on the law in effect at that time. The Service would process these applications in Years Two and
Three, and adopting employers would have a fixed date by which to adopt the approved plans
(for example, by the end of Year Five). In Years Three, Four and Five, all prototype defined
benefit plans would be submitted and processed, and employers would have to adopt these
plans by the end of Year Seven. Year Seven would also begin the next cycle, and all prototype
defined contribution plans would be submitted for approval based on the law in effect at that
1 In 2001 and 2003, the Service issued white papers describing various options that it was considering in order to
address the periodic fluctuations in its determination letter workflow. See Institute Memoranda to Pension
Committee No. 13-03 and Pension Operations Advisory Committee No. 26-03 [16051], dated May 13, 2003, and to
Pension Committee No. 61-01 and Pension Operations Advisory Committee No. 54-01 [13893], dated August 27,
2001.
2 The Announcements are available at the Service’s website at http://www.irs.gov/pub/irs-drop/a-04-32.pdf and
http://www.irs.gov/pub/irs-drop/a-04-33.pdf.
3 The Institute suggested a similar approach in its comment letter on the second IRS white paper. See Institute
Memorandum to Pension Committee No. 32-03 and Pension Operations Advisory Committee No. 55-03 [16487],
dated September 3, 2003.
2
time. The Service would reserve the right, however, to require good faith plan amendments
before the end of a cycle, when appropriate.
In addition, in Announcement 2004-33, the Service requests comment on a draft revenue
procedure outlining the issuance of opinion letters that would take into account the
requirements of EGTRRA. The draft proposes to revise the existing procedures to eliminate
some of the differences between the prototype and volume submitter programs while
maintaining essential features of each program.
The Service requests comments on the draft revenue procedure and the six-year
prototype amendment/approval cycle by August 2, 2004. If you have suggestions for the
Institute’s comment letter, please contact the undersigned by phone at (202) 371-5432, by fax at
(202) 326-5841, or by email at kireland@ici.org before June 15, 2004.
Kathy D. Ireland
Senior Associate Counsel