80. Failure of qualification

Statement of Requirement: Rev. Proc. 2023-37, 2023-51 I.R.B. 1491, sections 6.04 and 12.03(1)

Sample Plan Language:

If the employer's plan fails to attain or retain qualification, such plan will no longer participate in this Pre-approved Plan and will be considered to be an individually designed plan.

(Note to Reviewer: An Adopting Employer may rely on an Opinion Letter for a plan that amends the qualified plan of the Employer only if the form of the plan being amended satisfies the Code § 401(a) qualification requirements. Accordingly, prior to being amended, the Adopting Employer must have corrected any disqualifying provisions in its plan. S ee Rev. Proc. 2023-37, section 12.03(1).

After adopting a Pre-Approved Plan, the Provider (or Adopting Employer, if applicable) must timely adopt any required Interim Amendments. If a failure to timely adopt an Interim Amendment is not corrected within two years after the adoption deadline, the Adopting Employer’s plan will be treated as an individually designed plan at the end of that two-year period. See Rev. Proc. 2023-37, section 6.04.)

(Note to reviewer: Effective December 29, 2022, Section 305 of the SECURE 2.0 Act expands and permits qualified retirement plans, 403(b) plans, SEPs, and SIMPLE IRA plans to self-correct under EPCRS any “eligible inadvertent failures” to comply with applicable requirements of the Internal Revenue Code, except to the extent that (1) such failure was identified by the IRS prior to any action which demonstrates a specific commitment to implement a self-correction with respect to such failure, or (2) the self-correction is not completed within a reasonable period after such failure is identified. The correction period is indefinite and has no last

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day other than with respect to a failure identified by the IRS prior to any action which demonstrates a specific commitment to implement a self-correction with respect to such failure or with respect to a self-correction that is not completed within a reasonable period after such failure is identified. See Notice 2023-43, 2023- 24 I.R.B. 919, for additional guidance, pending any update to Rev. Proc. 2021-30, 2021-31 I.R.B. 172.)