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Automatic Approval of Funding Method Change for Takeover Plans

Generally, a change in the funding method for a single-employer defined benefit plan subject to minimum funding standards must be approved by the Treasury Department. An IRS announcement grants automatic approval for a change in funding method that results from a change in the enrolled actuary and actuarial business organization if the new enrolled actuary uses different valuation software or otherwise applies the funding method in a different manner than the prior enrolled actuary, and among other things, the funding target, target normal cost, and actuarial value of plan assets are within five percent of such values using the prior funding method. IRS Announcement 2015-3 is available here.

IRS Issues Revised Procedures for Determination Letter Requests

The IRS recently issued Revenue Procedure 2015-6 (the ?Ç£Rev. Proc.?Ç¥), which describes the IRS?ÇÖs revised procedures for requesting determination letters on the qualified status of retirement plans, including 401(k) plans, profit sharing plans, and defined benefit pension plans (?Ç£DL Request?Ç¥). Changes to the DL Request procedures include new IRS procedures for addressing procedurally or technically deficient DL Requests, new documentation to be included with a DL Request, clarified requirements for DL Requests involving merged plans, and a change in the address to which DL Requests should be submitted. The Rev. Proc. is effective as of February 1, 2015 and supersedes the IRS?ÇÖs prior DL Request procedures in Revenue Procedure 2014-6. Revenue Procedure 2015-6 is available?áhere.

January 2015