Pension Protection Act Blog

What happens if you thought a plan was not a Cycle A plan, and so you did not restate it for EGTRRA and did not submit it for a determination letter by January 31, 2007, and then you read Rev. Proc. 2007-44, and realize that the plan is a Cycle A plan, and should have been restated for EGTRRA and submitted for a determination letter by January 31, 2007. It is now too late to meet the January 31, 2007, deadline.

If the plan can fit within the exception just announced in Rev. Proc. 2007-44, the IRS has granted an extension for such Cycle A plans to January 8, 2008. In Section 21.03, the IRS grants the plan another 6 months after July 9, 2007, to restate and submit for a determination letter.

Section 21.03 states:

.03 Notwithstanding section 21.02, if an employer, sponsor or practitioner (entity) has made a determination with respect to a particular plan based on a reasonable and good faith interpretation of Rev. Proc. 2005-66 that the plan is not a Cycle A plan, and under this revenue procedure the plan is a Cycle A plan, which should have been submitted to the Service by January 31, 2007, then the entity has six months from July 9, 2007 to submit the plan to the Service. The plan will be considered on-cycle for Cycle A and will be reviewed by the Service using the annual Cumulative List based on the date of the determination letter submission. Thus, for example, a plan submitted on July 31, 2007 will be reviewed on the basis of the 2006 Cumulative List and the plan will be considered to have been submitted within the extended remedial amendment period.

The IRS has not defined what a reasonable and good faith interpretation of Rev. Proc. 2005-66 is.

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