The Internal Revenue Service issued a news release on November 5 with two very important relief provisions for governmental plans.  The first is that the IRS has implemented a one-time modification of the staggered remedial amendment program for governmental plans. Pursuant to the news release, sponsors of governmental plans may submit for determination letters during either Cycle C or Cycle E.  (Cycle E begins February 1, 2010 and ends January 31, 2011.)

If a governmental plan sponsor elects to file a determination letter application during Cycle E, all requirements for plans normally filing during Cycle E will still apply. Importantly, this option is a one-time modification. This means the determination letter cycle for a governmental plan filed during Cycle E will expire at the end of the next Cycle C or January 31, 2014.

The second relief provision is that the IRS will reduce the VCP fees for Cycle C filers by 50%. This is applicable to plans who have already filed in Cycle C, as well as those who file by January 31, 2009.

For additional information about this news release and how it impacts the determination letter application of your governmental plan, contact your Ice Miller Employee Benefits attorney, or Mary Beth Braitman, Terry A.M. Mumford, Lisa Erb Harrison, or Katrina Clingerman.