Cycle D 2008 Cumulative List of Changes for ERISA Qualified Plans Available

December 9th, 2008

The Internal Revenue Service (IRS) released Notice 2008-108, which contains the 2008 Cumulative List of Changes in Plan Qualification Requirements.  According to the IRS, this list is principally to be used by plan sponsors of individually designed plans which are considered Cycle D plans.  Generally, a plan is considered a Cycle D plan if the plan sponsor’s EIN ends in either 4 or 9, or if it is a multiemployer plan under §414(f).

According to the Notice, the IRS will begin accepting determination letter applications for Cycle D plans on February 1, 2009.  The submission period for Cycle D plans will end on January 31, 2010.

Notice 2008-108 contains information for plan sponsors about specifically identified plan issues that should be reviewed in determining whether a plan has been properly updated for recent law changes.  Information on legal updates contained in the 2008 Cumulative list includes the:

  • Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
  • Pension Funding Equity Act of 2004 (PFEA)
  • American Jobs Creation Act of 2004 (AJCA)
  • Katrina Emergency Tax Relief Act of 2005 (KETRA)
  • Gulf Opportunity Zone Act of 2005 (GOZA)
  • Pension Protection Act of 2006 (PPA)
  • U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007

According to the IRS, the 2008 Cumulative List does not include any guidance issued after October 1, 2008; any statutes enacted after October 1, 2008; any qualification requirements first effective in 2010 or later; or any statutory provisions that are first effective in 2009 for which there is no guidance identified in the Notice.  If a Cycle D plan submission for determination includes updates based on these excluded items, the IRS will not consider those updates in its determination letter review.  However, in order to be considered qualified by the IRS, a plan must comply with all relevant requirements, whether or not they are reflected in the 2008 Cumulative List.

The Notice also provides special rules for the PPA and the Heroes Earnings Assistance and Relief Act of 2008 (HEART).  Cycle D plans must be amended to include applicable PPA provisions.  However, Cycle D plans, whose first plan year beginning after January 1, 2009 ends on or after February 1, 2010, may defer submission of its plan until Cycle E, provided the Cycle E application is filed timely.  The plan will then be treated as a Cycle E plan only for the initial cycle and all subsequent filings would be made in Cycle D.

Cycle D plans may include HEART Act provisions but the IRS will not consider these updates in issuing determination letters for Cycle D plans.  However, since §107(a) of the HEART Act extends the applicability of qualified reservist distributions to participants ordered or called to duty after December 31, 2007, the IRS will treat an amendment for this HEART provision as if it were included in §1107 of the PPA.

Cycle D plan sponsors should have benefits counsel carefully review their qualified plans to determine what legal changes are required for their plans and which discretionary changes are desired.  For additional information or assistance, contact our office.

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