In Revenue Procedure 2022-40, the IRS recently expanded the determination letter program to allow applications by individually-designed 403(b) plans. This expansion will allow 403(b) plan sponsors to request a determination letter that expresses the IRS’ opinion that the plan’s terms (as stated in the plan document) meet the requirements under Section 403(b) of the Internal Revenue Code and other qualification requirements. The IRS indicates the availability for an initial plan determination is going to be staggered based on a 403(b) plan sponsor’s employer identification number (EIN), as provided in this table:
|If the EIN of the Plan Sponsor ends in:||A determination letter application may be submitted beginning on:|
|1, 2, or 3||June 1, 2023|
|4, 5, 6, or 7||June 1, 2024|
|8, 9, or 0||June 1, 2025|
If a 403(b) plan sponsor is requesting a termination determination letter, that application can be submitted any time on or after June 1, 2023.
Note that determination letters will not be issued for TEFRA church defined benefit plans (Regulation Section 1.403(b)-10(f)(2)) or a plan grandfathered under Revenue Ruling 82-102. In addition, the determination letter will not consider any multiple employer plan issues.
If you sponsor an individually designed 403(b) plan and would like to look into the use of the determination letter program for the plan, please reach out to any of our employee benefits attorneys for assistance.
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