The Internal Revenue Service recently released three pieces of guidance for retirement plans, reducing a user fee, modifying its policy on issuing opinion and advisory letters, and changing the pre-approved program for cash balance plans.

Revenue Procedure 2018-19, which the IRS issued last month, modifies Rev. Proc. 2018-4 and reduces a user fee. An earlier revenue procedure, Rev. Proc. 2018-4, increased the user fee for Form 5310 from $2,300 to $3,000. The new one, Rev. Proc. 2018-19, reverses that increase, rolling the fee back to the $2,300 level. The reduction took effect Jan. 2, 2018, so for any company that paid the higher fee, the IRS will issue them a refund of $700.

Announcement 2018-05, also issued in March, said the IRS will issue opinion and advisory letters for approved master and prototype plans and volume submitter defined benefit plans that were restated for changes in plan qualification requirements listed in 2012 and that were filed with the IRS during its second six-year remedial amendment cycle. The IRS anticipates it will issue the opinion and advisory letters on March 30, 2018, or, in some cases, as soon as possible after that date. An employer that use these pre-approved plan documents to restate a plan for the plan qualification requirements included on the 2012 Cumulative List will be required to adopt the plan document by April 30, 2020.

Starting May 1, 2018, and ending April 30, 2020, the IRS said it will also accept an application for an individual determination letter from certain employers who are eligible to submit a determination letter request under the second six-year remedial amendment cycle for defined benefit pre-approved plans. The IRS will announce in future guidance a delayed start date for the third six-year remedial amendment cycle for pre-approved defined benefit plans.

Lastly, Revenue Procedure 2018-21 changes the pre-approved plan program for cash balance plans. Rev. Proc. 2018-21 announced that non-standardized prototype and volume submitter defined benefit plans with a cash balance formula may now provide a rate equal to the actual rate of return on aggregate plan assets to determine interest credits for second six-year remedial amendment cycle plans filed under Rev. Proc. 2015-36. Originally, the implementation for accepting the actual rate of return in pre-approved defined benefit plans with a cash balance formula was for the third six-year remedial amendment cycle under Rev. Proc. 2017-41. Based upon comments after that revenue procedure was released last year, the IRS decided the change for the actual rate of return could be implemented for non-standardized prototype and volume submitter plans submitted during the second six-year remedial amendment cycle according to Rev. Proc. 2015-36.

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