SECTION 11. EXAMPLES

Examples 1 through 7 illustrate the extended remedial amendment period for new plans, amendments made to existing plans that are not made as a result of changes in qualification requirements, and amendments to existing plans that are made as a result of changes in qualification requirements. In each of these examples, assume that the plan is an individually designed plan that is intended to be qualified under § 401(a) and that the plan

amendments meet the requirements of § 411(d)(6).

Example 1 : Remedial amendment period for a new plan . Employer A, which is not a tax exempt employer, adopts a new individually designed plan, Plan M, on July 1, 2017. Plan M is effective January 1, 2017. Plan M’s plan year and Employer A’s tax year are the calendar year. Plan M contains a provision that does not satisfy the qualification requirements (a disqualifying provision under § 401(b)). Employer A discovers the disqualifying provision in February 2018. Pursuant to section 5.05(1) of this revenue procedure, the remedial amendment period for this disqualifying provision is extended to the later of (i) October 15, 2018 (the 15th day of the 10th calendar month after the end of the plan’s initial plan year), or (ii) the modified § 401(b) expiration date. The modified § 401(b) expiration date is the later of September 15, 2018 (the due date for filing Employer A’s tax return plus extensions) and the last day of the plan year in which the plan is put into effect (December 31, 2017). Thus, Employer A must correct the disqualifying provision in Plan M by October 15, 2018, retroactively effective beginning January 1, 2017, in order for Plan M to be qualified, and must correct Plan M’s operation to the extent necessary to reflect the corrective amendment.

Example 2 : Determination letter application filed for a new plan . The facts are the same as in Example 1, except that, instead of Employer A identifying the disqualifying provision, Employer A files a determination letter application and the IRS discovers the error. If Employer A submits Plan M for a determination letter by October 15, 2018, then, pursuant to § 1.401(b)– 1(e)(3), Employer A would have until 91 days after the date a favorable determination letter is issued with respect to Plan M to adopt an amendment that corrects the disqualifying provision retroactively effective beginning January 1, 2017 (the effective date of Plan M). To maintain plan qualification, Employer A must correct Plan M’s operation to the extent necessary to reflect the corrective amendment.

Example 3 : Remedial amendment period for amendment to an existing plan . Employer B maintains Plan N, an individually designed plan. In 2014, the IRS issued a determination letter for Plan N. On January 1, 2018, Employer B adopts and makes effective an amendment to Plan N’s vesting schedule. This amendment causes Plan N to fail to satisfy the requirements of the Code. Pursuant to section 5.05(2) of this revenue procedure, a remedial amendment to correct this disqualifying provision generally must be adopted by December 31, 2020, the end of the second calendar year following the calendar year in which the amendment is adopted or effective (whichever is later). The remedial amendment must be retroactively effective beginning January 1, 2018, the date the earlier plan amendment was effective, in order for Plan N to be qualified. Also, to maintain plan qualification, Employer B must correct Plan N’s operation to the extent necessary to reflect the corrective amendment.

Example 4 : Remedial amendment period for a change in qualification requirements . Employer C maintains Plan O, an individually designed plan. In July 2016, guidance is published in the Internal Revenue Bulletin that would require an amendment to Employer C’s plan in order to retain the plan’s qualification. The guidance is effective in 2017. The

July 18, 2016 142 Bulletin No. 2016–29

year will be reviewed based on the 2015 Cumulative List (Notice 2015–84). With the exception of a terminating plan, an individually designed plan must be restated to incorporate all previously adopted amendments into the plan document when a determination letter application is submitted.