Deadline nears to adopt preapproved DB plans for third cycle 

Defined benefit (DB) plan sponsors have until March 31, 2025, to adopt a preapproved plan document reflecting items on the 2020 Cumulative List. DB plan sponsors that adopt a preapproved document by this deadline can rely on the provider’s opinion letter to show their plan language satisfied Internal Revenue Code (IRC) qualification requirements during the third remedial amendment cycle. A list of preapproved plan documents is available on IRS’s website.

Sponsors that modify preapproved documents generally lose reliance on the provider’s opinion letter. However, sponsors can request a determination letter on modified documents using Form 5307 in either of the following cases:

• The sponsor modifies a nonstandardized preapproved document, and the modifications are sufficiently minor to avoid turning the plan into an individually designed plan
• The sponsor modifies any preapproved document (standardized or nonstandardized) solely to add language to satisfy the requirements of IRC Sections 415 and 416 due to the required aggregation of plans

Sponsors planning to submit Form 5307 must do so by March 31, 2025. Sponsors whose modifications turn their plan into an individually designed plan can’t use Form 5307. However, they may be able to request a determination letter using Form 5300 if eligible under IRS’s determination letter program for individually designed plans.

• IRS announces key deadlines for preapproved defined benefit plans (Feb. 16, 2023)
• IRS issues 2020 cumulative list of changes for preapproved DB plans (April 7, 2020)