Employee Benefits Alert – Retirement Plan Amendment Deadline Fast Approaching for Governmental Plan Sponsors

    By ESOPs & Employee Benefits

    The deadline to file a determination letter application with the IRS with regard to all individually designed governmental retirement plans is quickly approaching.

    Individually designed retirement plans are required to adopt necessary amendments and file updated plan documents with the IRS every five years. The deadline for the next governmental plan amendment cycle is January 31, 2014. While plan sponsors may elect to postpone the IRS filing for an additional two years, certain interim amendments are required to be adopted in the meantime and penalties for failure to adopt these amendments on a timely basis can be severe. Now is the time to begin the process of reviewing and updating your plan documents (and authorizing ordinances, if applicable) to avoid any IRS penalties.

    This IRS deadline applies to individually designed governmental plans and not to prototype or preapproved plan documents. Examples of individually designed plans include municipal retirement systems and other qualified defined benefit pension plans; supplemental retirement plans; optional retirement plans sponsored by state colleges and universities; and cash match plans.

    The members of Kaufman & Canoles’ Employee Benefits Practice Group are standing by to assist you with the determination letter process. We will work with you to review your plan documents for required changes, draft any necessary amendments (to plan documents, authorizing ordinances, or both), prepare and submit determination letter applications and required attachments, and interface with the reviewing IRS agents to ensure final receipt of a favorable determination letter. We can also help you determine if alternative plan designs, such as adoption of a prototype or pre-approved plan document, would help reduce costs associated with the determination letter process on an ongoing basis.

    With over fifty years of combined experience in qualified plan matters, the members of Kaufman & Canoles’ Employee Benefits Practice Group are fully versed in all legal requirements applicable to governmental retirement plans. In 2011, Kaufman & Canoles was appointed by the Attorney General to serve as Special Counsel for Employee Benefit Matters for the Commonwealth of Virginia. We have drafted plan documents, amendments, ordinances, and determination letter applications for numerous governmental entities, including state colleges and universities, municipalities, and local school boards. Our position as a mid-sized firm headquartered in the Tidewater area also allows us to perform this work at rates that are highly reasonable in comparison to those charged by our larger competitors in Richmond and Washington.

    The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2024.