The Internal Revenue Service (IRS) has limited its determination letter program, which many sponsors and administrators of qualified plans have relied on to document their qualified-tax status. In response, firms are launching services to fill the void.
Hanson Bridgett is launching Determination Letter Replacement Program (DLRP). It is designed for private-sector, multiemployer, and governmental individually designed plans that have participated in the IRS periodic determination letter program and have a current favorable IRS determination letter.
Under request and for a standard annual fee, DLRP will allow for the review of plan documents against the IRS annual Required Amendments List of changes in qualification requirements. It would also provide a list of plan amendments needed to comply with those changes and the applicable amendment deadlines. Moreover, the firm can issue an opinion letter to the plan sponsor or administrator that the plan, as timely amended to comply with those changes, continues to remain tax-qualified in form for the period since the plan’s last favorable IRS determination letter or private opinion letter. The opinion will be conditioned on the accuracy of the plan sponsor’s representations, documents and other information provided, and will not include operational compliance.
In order to participate in DLRP, the plan must meet the following requirements.
- The plan must be an individually designed plan. Plans using IRS pre-approved master and prototype and volume submitter plans, except those that cannot rely on the pre approved plan’s IRS advisory or opinion letter due to material modification, may not participate.
- The plan must have a current favorable IRS determination letter or private opinion letter.
- The plan sponsor or plan administrator must contact Hanson Bridgett by September 30 to request to participate in the DLRP, and pay an annual fee that will be invoiced. Hanson Bridgett will not automatically review plans for current clients; plan sponsors or plan administrators need to affirmatively notify Hanson Bridgett of their desire to participate in this new program.
- The plan sponsor or plan administrator must timely provide all relevant plan documents and other information needed to complete the review.
Although the standard DLRP fee will cover only the plans and services described above, the program may be customized to fit unique circumstances. For example, the firm will, upon request and for an additional fee, draft any required amendments, review and provide an opinion letter for a plan that does not have a current determination letter, or assist in performing an operational self audit. Hanson Bridgett will prepare required amendments for a flat fee, to be determined based on the scope and complexity of the amendments.