4-30-10 DC Plan Deadline
In its Summer 2009 issue of "Employee Plans News", the Internal Revenue Service reminds "employers entitled to use the pre-approved six-year cycle of an upcoming April 30, 2010 deadline to: 1) adopt the final approved version of the defined contribution pre-approved plan; and 2) submit applications for determination letters."
Baden Retirement Plan Services, and other plan document sponsors, are currently in the process of communicating with clients to obtain required information and data to help meet this important deadline. Plan sponsors should respond promptly and thoroughly to this information request to help keep the process moving along in order to meet the April 30, 2010 deadline. Plans affected by the six-year cycle that do not meet the deadline can become disqualified (loss of tax-deferral benefits) which means:
- Loss of tax deductions for nonvested contributions in open tax year
- Taxation of vested contributions to participants in open tax years
- Loss of trust tax exemption during open tax years
- Inability to roll over until requalified
The entire article on this topic,
Two-Year Adoption/Submission Period for Defined Contribution Pre-Approved Plans Expires on April 30, 2010, and the following articles are available in the "
Employee Plans News-Summer 2009", at the IRS's website:
- Interview with Sarah Hall Ingram - the new Commissioner of the Tax Exempt and Government Entities Division (TE/GE)
- ACT Issues Eighth Annual Report and Welcomes Ten New Members
- Monitoring IRAs for Required Minimum Distributions (RMDs)
- New Federal Income Tax Withholding for Pensions
- Free Phone Forums on the Employee Plans Compliance Resolution System(EPCRS) and 401(k)
- New Look for EP Large Case Program Web Page, Better Known as the Employee Plans Team Audit (EPTA)
Please
contact us with questions about how this information applies to your particular situation.