Читать книгу Auditing Employee Benefit Plans - Josie Hammond - Страница 30

Any ERISA plan is required to be in writing. The written document is to include the rules governing the operation of the plan and the management of plan assets. A pension plan is permitted, but not required, to apply for determination by the IRS of its qualified status. Most individually designed plans do obtain such letters. When a plan uses an IRS preapproved plan document (such as a prototype plan), the plan may not have a separate letter. Rather, the sponsor may rely on the opinion or advisory letter issued to the preapproved plan document sponsor. Effective May 1, 2012, the IRS revised the determination letter program so that many adopters of master or prototype plans will be unable to obtain an individual determination letter. Further, effective January 1, 2017, the IRS has eliminated the determination letter program covering amendments to individually designed plans. Existing determination letters will no longer expire, and the plan sponsor is required to make amendments as required by changes in the law or plan designs. But, they may not be able to obtain a determination letter covering such amendments. The IRS has stated that it will issue determination letters upon request at plan formation and termination, as well as in other circumstances as it concludes to be appropriate. It is not yet clear what that latter category covers. Practitioners are hoping that it will cover significant changes in the governing law or regulations or possibly specific facts, such as before a merger. These changes do not affect the opinion letter program covering preapproved plans such as master, prototype, or volume submitter documents.

Historically, 403(b) plans involved a series of documents—board minutes, employee handbooks, annuity or investment contracts, and so on. However, the IRS final 403(b) regulations required all 403(b) plans to be documented more formally. A single written agreement is not required, but the plan document(s) must reflect all of the operating terms and conditions of the plan and must have been in place by December 31, 2009. The IRS has initiated a system for the pre-approval of prototype or volume submitter 403(b) documents. There is no program for the approval of individually designed 403(b) plans.

Under the IRS pre-approved 403(b) plan document program, March 31, 2020 is the last day for an employer to adopt a pre-approved 403(b) plan. After that date, adoption of a pre-approved 403(b) plan will no longer give an employer retroactive relief plan document-related qualification defects that arose since 2010.

Welfare plans have no formal approval process. However, where a welfare plan is funded through a voluntary employee’s beneficiary association (VEBA) Section 501(c)(9) trust, written request for tax-exempt status on the VEBA is mandatory for plans established after 1984.