SECTION 3. CHANGES FROM

DRAFT REVENUE PROCEDURE IN ANNOUNCEMENT 2004–71

.01 Announcement 2004–71 contained a draft revenue procedure setting forth the rules and procedures for both the five-year remedial amendment cycle for individually designed plans and six-year amendment/approval cycle for pre-approved plans. The Service sought public comment before finalizing these rules and procedures. This revenue procedure retains much of the original substance of the draft revenue procedure but the revenue procedure has been restructured (that is, Part II applies to all plans) and minor revisions and clarifying language have been added. The most significant of the changes are listed below.

.02 The application and extension of the remedial amendment period under § 401(b) to the end of the remedial amendment cycle has been expanded to include pre-approved plans, as well as individually designed plans. In addition, the EGTRRA remedial amendment period is extended to the end of the initial six-year remedial amendment cycle. (sections 5, 16, 18)

.03 When a plan qualification requirement changes either due to a statutory change, a regulation, or other published guidance, causing a plan to no longer be qualified, a timely adopted interim amendment will generally be required. Any other change to a plan must also be reflected in a timely adopted plan amendment. If the timely adopted plan amendment (including any required interim amendment) does not satisfy the qualification requirements, then a remedial amendment must be adopted by the end of the remedial amendment cycle. (sections 5, 6)

.04 In addition to changes and requirements identified in each year’s Cumulative List of Changes in Plan Qualification Requirements, the Service will consider in its review of any opinion, advisory or determination letter application all qualification requirements in effect, or guidance published, before the issuance of the Cumulative Lists. (section 4.05)

.05 This revenue procedure provides that the submission deadline for minor modifier placeholder applications and

2005–37 I.R.B. 512 September 12, 2005

a change in the requirements provided in regulations or other guidance published in the Internal Revenue Bulletin. For purposes of section 5.01, a disqualifying provision includes the absence from a plan of a provision required by or, if applicable, integral to the applicable change in the qualification requirements of the Code.

.03 This section 5.03 extends the remedial amendment periods for disqualifying provisions described in § 1.401(b)–1(b)(1) that would otherwise apply under § 1.401(b)–1 to the end of the remedial amendment cycles described in section 6.01 if the disqualifying provision was a provision of, or absence of a provision from, a new plan and the plan was intended, in good faith, to be qualified. The same extension of the remedial amendment period applies to a disqualifying provision (including a disqualifying provision described in section 5.01) in the case where the employer adopts an amendment to an existing plan and the amendment was adopted timely and in good faith with the intent of maintaining the qualified status of the plan. In addition, the same extension of the remedial amendment period applies to a disqualifying provision described in section 5.01 in the case where the employer (or sponsor or practitioner, if applicable) reasonably and in good faith determines during the period when an interim amendment to reflect a qualification change would otherwise be required under section 5.05 that no amendment is required because the qualification change does not impact provisions of the written plan document. Thus, for example, if a sponsor, practitioner, or employer makes such a determination and the Service in its review of the opinion, advisory, or determination letter application finds that an amendment is required, the plan would still be eligible for the five or six-year remedial amendment cycle to correct the disqualifying provision as described in section 5.01. The Service will make the final determination in all cases as to whether the adoption of an interim amendment or the absence of an interim amendment was reasonable and in good faith.

.04 A qualified plan must be operated in accordance with written plan documents. Thus, when there are statutory or regulatory changes with respect to plan qualification requirements that will impact provisions of the written plan document, the

section 24.03 of Rev. Proc. 2005–16 will be considered an individually designed plan for the current and future remedial amendment cycles. Thus, the remedial amendment cycle in which the employer impermissibly amends the pre-approved plan and subsequent remedial amendment cycles will be determined under Part III of this revenue procedure. (section 17.09(3))