The Internal Revenue Service (IRS) issued Revenue Procedure 2016-4 outlining annual procedures for requesting letter rulings.
In the guidance, the IRS says a section has been added to note that opinion and advisory letters will be issued to 403(b) pre-approved plans and provide information regarding the process in obtaining such letters.
In April 2013, the agency issued Revenue Procedure 2013-22 establishing the program and providing an instruction manual for how the program works. The deadline for submitting applications for opinion and advisory letters regarding the acceptability under Section 403(b) of the Internal Revenue Code of the form of prototype plans and volume submitter plans was April 30, 2015.
Though 403(b) plan sponsors had to adopt a written plan by December 31, 2009, they will be able to restate their plans to adopt one of the prototypes when the IRS makes them available. Those plan sponsors that did adopt their written plans by the 2009 deadline, will also be given a remedial amendment period to retroactively correct plan operational failures—i.e. plan operational practices that did not conform to document requirements or features.
In anticipation of this, to encourage employers who sponsor 401(a) qualified retirement plans and 403(b) plans to correct plan failures through the IRS’ Voluntary Correction Program (VCP), the IRS reduced the general VCP fees for most new submissions made on or after February 1, 2016. The agency also added references to 403(b) pre-approved plans in its user fee guidance.Another notable change is that the letter ruling guidance has been modified to clarify that the IRS Employee Plan Compliance Resolution System (EPCRS) covers SIMPLE plans and 457(b) plans.
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