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IRS Releases 2013 Cumulative List of Changes in Plan Qualification Requirements
Practical Law Legal Update 6-551-7325 (Approx. 6 pages)
IRS Releases 2013 Cumulative List of Changes in Plan Qualification Requirements
by Practical Law Employee Benefits & Executive Compensation
| Published on 13 Dec 2013 • USA (National/Federal) |
The Internal Revenue Service (IRS) recently issued Notice 2013-84, which provides the 2013 Cumulative List of Changes in Plan Qualification Requirements. The Cumulative List sets out the changes to employee benefit plan requirements that the IRS will review when it determines if a plan has been properly updated. The 2013 Cumulative List applies to plans that are submitted for a determination letter during Cycle D (from February 1, 2014 to January 31, 2015).
IRS Notice 2013-84
The IRS recently issued Notice 2013-84, which provides the 2013 Cumulative List of Changes in Plan Qualification Requirements (Cumulative List) (IRS Notice 2013-84, (Dec. 12, 2013)). The Cumulative List contains a compilation of changes to employee benefit plan requirements that are embodied in statutes and IRS guidance. The IRS publishes a Cumulative List annually according to Section 4 of IRS Revenue Procedure 2007-44. The 2013 Cumulative List contains the plan qualification requirements from the 2009, 2010, 2011 and 2012 Cumulative Lists, as well as new requirements made in 2013 (the changes that were not in previous Cumulative Lists are labeled as "New" in the 2013 Cumulative List).
Employee benefit plan sponsors, administrators and attorneys should rely on the Cumulative List when they submit determination letter applications to the IRS during Cycle D, the submission period that begins February 1, 2014 and ends January 31, 2015 (see Practice Note, Applying for an IRS Determination Letter).
The changes contained in the Cumulative List are specifically identified for review by the IRS regarding whether a plan filing in Cycle D has been properly updated. The IRS will not consider in its review of determination letter applications:
- The 2010 final hybrid plan regulations (other than provisions related to IRC Section 411(a)(13)(A) and provisions of the regulations effective for plan years beginning on or after January 1, 2011), unless the plan has already been amended to satisfy those regulations.
- Qualification requirements first effective in 2015 or later.
- Statutory provisions that are first effective in 2014 that are not identified in the Notice.
- Guidance issued and statutes enacted after October 1, 2013, except:
- final rules permitting mid-year reduction or suspension of safe harbor nonelective contributions under IRC Section 401(k) and revising requirements for the reduction or suspension of safe harbor matching contributions under IRC Section 401(m) (see Legal Update, IRS Final Rule Simplifies Requirements to Suspend or Reduce Safe Harbor Contributions Mid-year); and
- IRS Notice 2013-74, which provides guidance on rollovers from 401(k) plans to designated Roth accounts in the same plan (in-plan Roth rollovers).
The Cumulative List applies mainly to:
- Single employer individually designed defined contribution plans that are in Cycle D.
- Single employer individually designed defined benefit plans that are in Cycle D.
- Multiemployer plans described in IRC Section 414(f).
The changes in the Cumulative List do not extend the deadline by which a plan must be amended to comply with statutory, regulatory or guidance changes. For a plan to be qualified, it must comply with all qualification requirements, not just those in the Cumulative List.
The 2013 Cumulative List includes relevant legal changes as set out in:
- The U.S. Troop Readiness, Veterans’ Care, Katrina Recovery and Iraq Accountability Appropriations Act.
- The Heroes Earnings Assistance and Relief Tax Act of 2008.
- The Worker, Retiree, and Employer Recovery Act of 2008.
- The Small Business Jobs Act of 2010.
- The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PPA 2010).
- The Moving Ahead for Progress in the 21st Century (MAP-21) Act.
- The American Taxpayer Relief Act of 2012.
The 2013 Cumulative List provides changes in 27 different sections of the Internal Revenue Code (IRC). The new additions to the Cumulative List include the recent changes required by:
- The Supreme Court's decision in US v. Windsor, which held that Section 3 of the Defense of Marriage Act is unconstitutional, and IRS Revenue Ruling 2013-17, which extends IRS recognition to same-sex marriages where the same-sex married couple is domiciled in a state that does not recognize same-sex marriage but was lawfully married in a state that recognizes same-sex marriage (see Legal Updates, Supreme Court: DOMA Section 3 is Unconstitutional and Proposition 8 Proponents Lack Standing and IRS Adopts Same-sex Marriage Recognition Rule).
- IRS Notice 2013-17, which provides relief from anti-cutback rules for an amendment to an ESOP to eliminate all in-service distribution options previously used to satisfy the diversification requirements of IRC Section 401(a)(28)(B)(i) (see Legal Update, Anti-cutback Relief from IRC Section 411(d)(6) for Certain ESOP Amendments).
- The final rules permitting mid-year reduction or suspension of safe harbor nonelective contributions under IRC Section 401(k) and revising requirements for the reduction or suspension of safe harbor matching contributions under Section 401(m) (see Legal Update, IRS Final Rule Simplifies Requirements to Suspend or Reduce Safe Harbor Contributions Mid-year).
- IRS Notice 2013-74, which provides guidance on rollovers from 401(k) plans to designated Roth accounts in the same plan (in-plan Roth rollovers).
- IRS Notice 2013-11, which provides guidance on the rates that are used to compute the minimum contribution requirements for single-employer defined benefit plans under IRC Section 430 and ERISA Section 303 (29 U.S.C. 1083), as amended by MAP-21, for plan years beginning in 2013.
Practical Implications
Employee benefit plan sponsors, administrators and attorneys should rely on the 2013 Cumulative List when they submit determination letter applications during Cycle D, the submission period that begins February 1, 2014 and ends January 31, 2015 (see Practice Note, Applying for an IRS Determination Letter: Timeframe for Filing for an IRS Determination Letter). However, the Cumulative List does not extend the deadline by which a plan must be amended to comply with statutory, regulatory or guidance changes. Except as provided in Notice 2013-84, guidance issued or statutes enacted after October 1, 2013 will not be reviewed by the IRS in determination letter applications. For a collection of resources relating to filing IRS determination letters, see Retirement Plan Determination Letters Toolkit.