The IRS has opened up its plan determination letter program to a limited number of existing individually designed plans in Revenue Procedure 2019-20. The IRS had indicated in various forums that the agency would begin to reopen its determination program to cover certain existing plans. Until this procedure, the program had been limited to new individually designed plans and those that were looking for a letter at the time the plan was being terminated.
A determination letter is a ruling from the IRS that the language of the plan is in compliance with the requirements for the plan to be treated as a qualified retirement plan. While the letter does not cover issues that may arise with operation of the plan, it does assure that if the plan is operated in accordance with the plan document and other provisions of the law that it should not be at risk of losing its qualified status—in which case it would no longer be a tax exempt trust.
If a plan was found not to be qualified, employer contributions to the plan on behalf of employees would either be taxable to the employee at the time of contribution or nondeductible to the employer until includable in the income of the employer. As well, the earnings of funds inside the plan would be taxable.
This procedure allows certain existing plans to ask for a determination letter. The first class of plans that can ask for a determination letter are statutory hybrid defined benefit plans (as defined at Reg. §1.411(a)(13)-1(d)(5)). Statutory hybrid defined benefit plans are those that compute accrued benefits by reference to a hypothetical account balance—commonly referred to as “cash balance plans.” A Tax Notes Today article on the revenue procedure quoted Elizabeth Thomas Dold of the Groom Law Group as noting that this procedure will be useful for sponsors of hybrid cash balance plans with a determination letter issued before the January 2017 effective date of the final cash balance plan regulations (TD 9743).
The second class of existing plans that can apply for a determination letter are merged plans. In this case, the ruling covers plans described in Reg §1.414(l)-1(b)(2) that were previously maintained by unrelated employers that a newly combined entity (such as the result of a merger or other acquisition) seeks to combine. Such combinations often take place following mergers and other acquisitions and the new ruling helps insure the new combined plan does not run afoul of rules that apply to modifications of the existing plans.
The procedure also provides limited sanction relief for affected plans, allowing for a simplified method for cleaning up such plans if the determination letter process uncovers issues with the plans as they existed before going through the determination letter process.
 Revenue Procedure 2019-20, Section 4
 IRC §411(a)(13)
 Kristen A. Parillo, “IRS Partially Reopens Determination Letter Program,” Tax Notes Today, May 2, 2019,
2019 TNT 85-2, https://www.taxnotes.com/tax-notes-today/benefits-and-pensions/irs-partially-reopens-determination-letter-program/2019/05/02/29fw5 (subscription required)
 Revenue Procedure 2019-20, Section 5
 Revenue Procedure 2019-20, Sections 7 and 8