IRS extends reliance period for certain retirement plans to 1999.

• Author: Josephs, Stuart R.

The Service has again extended the period for certain retirement plans to be amended to comply with the final nondiscrimination regulations. These plans may, in prescribed circumstances, rely on previously issued determination letters until the last day of the plan year beginning before 1999; see Rev. Proc. 93-9.

Individually designed defined

contribution plans

Specified individually designed defined contribution plans (including volume submitter plans) do not have to be amended for IRS regulations or other releases after the date of the determination letter until the earlier of - the last day of the plan year beginning before 1999; or - a date established by subsequent legislation after the determination letter.

Specified plans must:

* Be eligible for a determination letter under a designated revenue procedure.

* Request or have requested a determination letter before 1994.

* Receive a favorable determination letter for all Tax Reform Act of 1986 (TRA) issues pursuant to that request. TRA issues are those determined under the Tax Reform Act of 1986 and later laws amending the Internal Revenue Code on or before Dec. 31, 1993. (Rev. Proc. 93-9, Section 1.01.)

Eligible plans

The following plans are eligible for a determination letter under a designated revenue procedure:

* Under Rev. Proc. 91-66 (as modified by (Rev. Proc. 92-60), a plan (including a governmental plan) is eligible to receive a determination letter that takes into account all the TRA requirements, including those first effective in 1989 or later, if the plan meets a design-based nondiscrimination safe harbor under the final Sec. 401(a)(4) regulations and satisfies certain other requirements.

* Under Section 5 of Rev. Proc. 92-60, a plan that does not benefit any highly compensated employee. The sponsor of such a plan may request a determination letter that takes into account all TRA requirements, including those first effective for the 1989 plan year or latter, even though the plan fails to satisfy the eligibility criteria of Rev. Procs. 91-66 and 92-60.

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