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.Read More