SECTION 2. BACKGROUND

.01 Section 401(b) of the Code provides a remedial amendment period during which a plan may be amended retroactively to comply with the Code’s qualification requirements. Section 1.401(b)–1 of the Income Tax Regulations describes

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which the plan is put into effect or the last day of the plan year in which the plan is put into effect. A new plan maintained by more than one employer need not be amended until the last day of the tenth month following the last day of the plan year that includes the date the plan is put into effect.

.04 For a disqualifying provision that is an amendment to an existing plan described in § 1.401(b)–1(b)(1), the remedial amendment period begins on the earlier of the date the plan amendment is adopted or put into effect and, in the case of a plan maintained by one employer, ends on the later of the due date for filing the employer’s tax return (including extensions) for the taxable year in which the amendment is adopted or effective (whichever is later) or the last day of the plan year in which the amendment is adopted or effective (whichever is later). In the case of an amendment to an existing plan maintained by more than one employer, the plan need not be amended until the last day of the tenth month following the last day of the plan year in which the amendment is adopted or effective (whichever is later).

.05 For a disqualifying provision described in § 1.401(b)–1(b)(3), the remedial amendment period begins on the date on which the change becomes effective with respect to the plan or, in the case of a provision that is integral to a qualification requirement that has been changed, the first day on which the plan is operated in accordance with the provision as amended. In the case of a plan maintained by one employer, the remedial amendment period for a disqualifying provision described in § 1.401(b)–1(b)(3) ends on the later of (1) the due date (including extensions) for filing the income tax return for the employer’s taxable year that includes the date on which the remedial amendment period begins or (2) the last day of the plan year that includes the date on which the remedial amendment period begins. A plan maintained by more than one employer

need not be amended until the last day of the tenth month following the last day of the plan year in which the remedial amendment period begins.

.06 Section 1.401(b)–1(f) provides that the Commissioner may extend the remedial amendment period at his discretion.

.07 Notice 2001–42, 2001–2 C.B. 70, provides a remedial amendment period under § 401(b), ending no earlier than the end of the 2005 plan year, in which any needed retroactive remedial plan amendments for EGTRRA must be adopted (the EGTRRA remedial amendment period). The availability of the EGTRRA remedial amendment period is conditioned on the timely adoption of required good faith EGTRRA plan amendments. In general, a good faith EGTRRA plan amendment is adopted timely if it is adopted by the later of the end of the plan year that includes the effective date of the EGTRRA change or the end of the plan’s GUST remedial amendment period. ¹ Notice 2001–42 further provides that until further notice, determination letters will not consider and may not be relied on with respect to whether a plan satisfies the qualification requirements of the Code as amended by EGTRRA. However, an employer’s ability to rely on a favorable determination letter will not be adversely affected by the timely adoption of good faith EGTRRA plan amendments. ²

.08 The end of the EGTRRA remedial amendment period is also the last day on which retroactive remedial amendments may be adopted with respect to the requirements of the final regulations under § 401(a)(9) of the Code (required minimum distributions), Rev. Rul. 2001–62, 2001–2 C.B. 632 (applicable mortality table) and Rev. Rul. 2002–27, 2002–1 C.B. 925 (deemed section 125 compensation). Except with respect to the requirements of the final § 401(a)(9) regulations for defined benefit plans, the availability of the remedial amendment period with respect to the three requirements is conditioned on

the adoption of plan amendments by the time specified in the applicable guidance (or, in the case of the final § 401(a)(9) regulations published on April 17, 2002 with respect to defined contribution plans, in Rev. Proc. 2002–29, 2002–1 C.B. 1176, as modified by Rev. Proc. 2003–10, 2003–1 C.B. 259). .09 Rev. Proc. 2004–25, 2004–1 C.B. 791, extends the remedial amendment period with respect to disqualifying provisions described in § 1.401(b)–1(b)(1) that are put into effect (in the case of new plans) or adopted (in the case of existing plans) after December 31, 2001, to the end of the EGTRRA remedial amendment period. The effect of Rev. Proc. 2004–25 is to ensure that plan sponsors do not need to apply for more than one determination letter during the EGTRRA remedial amendment period simply because they have put a plan into effect or adopted voluntary plan amendments after December 31, 2001. The revenue procedure does not extend any other existing plan amendment or determination letter submission deadlines, such as the deadline for adoption of good faith plan amendments for EGTRRA or the final § 401(a)(9) regulations.

.10 In Announcement 2004–32, 2004–1 C.B. 860, the Service announced its decision to implement a system of five-year staggered remedial amendment periods under § 401(b) of the Code for individually designed plans. The Service also announced that it was considering implementation of a system of six-year amendment/approval cycles for pre-approved plans. These announcements were the outcome of the Service’s comprehensive review of its policies and procedures for issuing determination letters on the qualified status of retirement plans. As part of that review, the Service considered public comments on two white papers on the future of the determination letter program which the Service published in 2001 and 2003 (that is, Announcement 2001–83,

1 The term “GUST” refers to the following:

• the Uruguay Round Agreements Act, Pub. L. 103–465;

• the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103–353;

• the Small Business Job Protection Act of 1996, Pub. L. 104–188;

• the Taxpayer Relief Act of 1997, Pub. L. 105–34;

• the Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105–206; and

• the Community Renewal Tax Relief Act of 2000, Pub. L. 106–554. The GUST remedial amendment period generally ended on the later of February 28, 2002, or the end of a plan’s 2001 plan year. However, for certain plans eligible for an extended GUST remedial amendment period under Rev. Proc. 2000–20, 2000–1 C.B. 553, the period generally ended on September 30, 2003.

2 Section 3.03 of Rev. Proc. 2005–6, 2005–1 I.R.B. 200, provides that until further notice, a determination letter will not consider and may not be relied on with respect to whether a plan satisfies the qualification requirements of the Code as amended by EGTRRA.

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word-for-word identical adopter applications is January 31, 2006. In addition, the January 31, 2006 submission deadline also applies to mass submitter sponsors and practitioners and national sponsors maintaining defined contribution pre-approved plans for the initial six-year remedial amendment cycle (that is, the EGTRRA remedial amendment period). (section 18.02) .06 Rather than Cycle A, the remedial amendment cycle for multiemployer plans is Cycle D and the remedial amendment period for multiple employer plans is Cycle B. (sections 10.02, 10.03)

.07 The election offered to members of a controlled group under § 414(b) or (c) or an affiliated service group under § 414(m) is available only in situations where there is more than one plan sponsored by the members of the controlled group or affiliated service group. (section 10.06)

.08 The revenue procedure clarifies the eligibility rules for an employer who qualifies for the six-year remedial amendment/approval cycle. (section 17)

.09 This revenue procedure provides guidance for filing procedures for an employer who amends an M&P plan but remains in the six-year remedial amendment/approval cycle as provided in section 24.02 of Rev. Proc. 2005–16, except under limited circumstances. (section 19)

.10 An adopting employer of a pre-approved plan who amends the approved plan document to incorporate a type of plan not permitted in the pre-approved plan program (that is, a type listed in sections 6.03 and 16.02 of Rev. Proc. 2005–16) or adopts an individually designed plan whose underlying plan document is not based upon a pre-approved plan will remain in the six-year remedial amendment cycle in effect on the date of such amendment or adoption, but will then shift to the five-year remedial amendment cycle for individually designed plans. Thus, the subsequent five-year remedial amendment cycle that ends after the closing of the six-year remedial amendment cycle in effect on the date of such amendment or adoption will be determined under Part III of this revenue procedure applicable to individually designed plans. (section 17.09(2))

.11 An employer who amends a pre-approved plan to such an extent that the Service determines the plan falls under

2001–2 C.B. 205 and Announcement 2003–32, 2003–1 C.B. 933). .11 In Announcement 2004–33, 2004–1 C.B. 862, the Service published for comment a draft revenue procedure containing the procedures for issuing opinion and advisory letters for pre-approved plans. In the announcement, the Service also asked for comments on its proposal to implement a system of six-year amendment/approval cycles for pre-approved plans. After receiving favorable comments in response to Announcement 2004–33, the Service has decided to proceed with implementation of this system in conjunction with the implementation of the five-year staggered remedial amendment period system for individually designed plans. This revenue procedure implements both systems, effective with the opening of the determination, opinion, and advisory letter programs for EGTRRA.

.12 In Announcement 2004–71, 2004–40 I.R.B. 569, the Service published for comment a draft revenue procedure which consisted of a description of the five-year remedial amendment cycles for individually designed plans and a description of the procedures for implementing the six-year amendment/approval cycle for pre-approved plans.

.13 In Notice 2004–84, 2004–52 I.R.B. 1030, the Service published the 2004 Cumulative List of Changes in Plan Qualification Requirements which contains qualification requirements for defined contribution pre-approved plans to be used for their first submission under the six-year remedial amendment cycle.

.14 In Rev. Proc. 2005–16, 2005–10 I.R.B. 674, the Service announced the opening of the initial six-year remedial amendment cycle for defined contribution pre-approved plans. As of February 17, 2005, the Service began to accept applications for opinion and advisory letters for defined contribution pre-approved plans which take into account the qualification requirements set forth in the 2004 Cumulative List. The revenue procedure also contains the rules for issuing opinion and advisory letters for pre-approved plans.

.15 In Announcement 2005–36, 2005–21 I.R.B. 1095, the Service announced the submission deadline for sponsors and practitioners maintaining defined contribution mass submitter and national sponsor plans for the initial six-year re

medial amendment cycle is October 31, 2005.