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Groom Law Offers Plan Document Compliance Service

The pullback of the IRS determination letter program calls for a new approach to maintain tax-qualification of retirement plan documents, Groom says.

By Rebecca Moore editors@plansponsor.com | February 21, 2017

Groom Law Group announced it will offer plan sponsors a practical solution for maintaining Internal Revenue Service (IRS)-compliant retirement plan documents now that the IRS is no longer issuing periodic determination letters.

The IRS ended its five-year determination letter cycle for individually designed plans. Groom says the abrupt pullback of this 60-year-old IRS program calls for a new approach for employers to maintain the tax-qualification of their plan documents. Such IRS qualification is essential to preserve fully tax-deductible employer contributions and pre-tax participant contributions; tax exemption for trust investment earnings; and tax deferral and rollovers for employees.

Groom has developed its Document Compliance Service (DCS) for individually designed plans that have current IRS determination letters. The service builds on a plan’s last determination letter from the IRS, the IRS’ new “required amendment” lists and Groom’s extensive and continuous monitoring of legal developments as they arise. The end result of this effort will be an opinion intended to confirm continued satisfaction of the IRS document requirements applicable to an employer’s plan(s).

"We have designed this program recognizing that the IRS has emphasized the importance of an opinion of legal counsel for individually designed plans as we go forward,” David Levine, with Groom Law Group, Chartered, tells PLANSPONSOR.

DCS is available for tax-qualified plans of all types, including pension, cash balance, pension equity, profit sharing, 401(k), employee stock ownership plans (ESOPs) and money purchase pension plans. And all types of plan sponsors may take advantage of the service, including corporate, tax-exempt, governmental and other entities.

Without updated determination letters, plan sponsors and fiduciaries may still need documentation of IRS plan qualification to satisfy requests from plan auditors, compliance officers, investment managers and third-party administrators, among others.

Groom designed DCS to serve as a key internal control for an organization’s plans, and to help avoid costly IRS plan document corrections. DCS also is expected to be available to support merger and acquisition activities.

“We have designed this program to assist plan sponsors and their service providers with coming up with practical solutions that allow them to represent to investment managers and courts of law that their plans satisfy the IRS qualification requirements," Levine adds.

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