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Business Tax

Rev Proc: Procedures for Issuing Opinion Letters for Pre-Approved Tax-Sheltered Annuity Plans

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

The IRS has issued a revenue procedure setting forth, among other things, the IRS’s procedures for issuing Opinion Letters regarding the satisfaction in form of Code Sec. 403(b) pre-approved tax-sheltered annuity (TSA) plans for the second Remedial Amendment Cycle (Cycle 2). The revenue procedure also sets forth the rules for determining when Remedial Amendment Periods expire for pre-approved TSA plans.

In addition, the revenue procedure modifies the procedures for the pre-approved TSA plan program to be more similar to the procedures applicable under the Code Sec. 401(a) pre-approved plan program in several ways, including:

  • Simplifying the pre-approved TSA plan program by eliminating the distinction between prototype and volume submitter plans;
  • Providing that the IRS will issue a Cumulative List of Changes in the Code Sec. 403(b) Requirements (Cumulative List) identifying the Code Sec. 403(b) Requirements that the IRS will take into account in reviewing pre-approved TSA plans submitted for Cycle 2;
  • Making pre-approved TSA plan program provisions regarding reliance on an Opinion Letter more similar to the provisions applicable under the Code Sec. 401(a) pre-approved plan program, including provisions that permit the submission during the Employer Adoption Window of an application for a determination letter using Form 5307, Application for Determination for Adopters of Modified Volume Submitter Plans, by
    1. An Adopting Employer of a Nonstandardized Plan that makes amendments to the plan that are not extensive, or
    2. An Adopting Employer of any pre-approved TSA plan (whether a Standardized Plan or a Nonstandardized Plan) that adds language to satisfy the requirements of Code Sec. 415 due to the required aggregation of plans; and
  • Providing details regarding the system of cyclical Remedial Amendment Periods that follows the Initial Remedial Amendment Period.

The revenue procedure provides that the On-Cycle Submission Period for Cycle 2 applications will begin on May 2, 2022, and end on May 1, 2023.

The revenue procedure extends the plan amendment deadline for making interim amendments with respect to a change in Code Sec. 403(b) Requirements, for most plans, until the end of the second calendar year following the calendar year in which the change in Code Sec. 403(b) Requirements is effective with respect to the plan.

The revenue procedure provides the date on which the limited extension of the Initial Remedial Amendment Period (defined in the revenue procedure) expires and extends the deadline for adopting an initial amendment (if applicable) that is required under certain circumstances in order for the limited extension of the Initial Remedial Amendment Period to apply.

In addition, the revenue procedure provides rules for permitting the participation of employees of certain church-related organizations, as described in Code Sec. 414(e)(3)(B), in a pre-approved TSA plan that is intended to be a Retirement Income Account, including special rules for amending a Cycle 1 pre-approved TSA plan that is intended to be a Retirement Income Account to permit the participation of employees of certain church-related organizations, as described in Code Sec. 414(e)(3)(B) retroactive to the beginning of Cycle 2.

To continue your research on pre-approved TSA plans, see FTC 2d/FIN ¶T-10720.

 

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