| Test Your Human Resources Knowledge | ||
|
| Labor Law Journal Submissions | ||
|
| Labor Arbitrators' Awards and Biographies | ||
5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
Surveys conducted by IRS Employee Plans (EP) indicate that the main concern of plan administrators and practitioners is the length of the process and the amount of time that the EP spends on issues, according to Joseph Grant, Director of IRS Employee Plans, Office of Rulings and Agreements. Grant, who started as director in August 2005, spoke at the Washington, D.C., Bar Association on May 2, 2006, to discuss new developments in EP's Office of Rulings and Agreements and to share his vision for EP with practitioners.
Grant explained that the length of the process for resolving issues can be attributed to the relatively small workforce of 280 people in the Office of Rulings and Agreements, and significant backlogs. Grant said his focus is on making EP more responsive and timely.
He noted that the determination letter process is one of the lengthiest processes in the Office of Rulings and Agreements. According to Grant, approximately 286 days elapse, on average, from the application time to the time a determination letter is issued. The open inventory in the Office of Rulings and Agreements consists of about 10,000 determination letter requests.
This area will be improved with the release of the new EPCRS revenue procedure, Grant said. He warned that, with the changes identified in the new revenue procedure, there will be some uncertainty for plans and practitioners and that he will aim to make the process as transparent as possible during the transition.
Grant responded to a question regarding the backlog for issuing determination letters for cash balance plans. He estimated that there are currently 1,200 cash balance determination letters pending in the Office of Rulings and Agreements and many have been there for years. Grant said that the office's plan as to what to do with these determination letters depends in part on the legislation pending in Congress and, until there is resolution regarding that legislation, the office will not have a defined plan.
CCH Note: The IRS imposed a moratorium on the approval of cash balance conversions in September 1999. Proposed regulations issued in 2002 would effectively lift the moratorium and enable employers to convert traditional pension plans to cash balance plans without jeopardizing the qualified status of the plans, as long as the conversion was implemented on an age-neutral basis. However, the IRS will not lift the moratorium and resume issuing determination letters on converted cash balance plans prior to the publication of final regulations. The pension reform measures being reconciled in conference (H.R. 2830) would provide prospective validation of cash balance conversions.
Backlogs are also apparent in the voluntary compliance area and, in the last six months, the average time to complete a voluntary compliance case has been 413 days. Grant said that his goal is to be able to respond to these cases in 120 days and that he is working on this by reducing the backlog. He warned practitioners that they should expect the process to take longer if they do not cooperate with EP's requests for information.
The technical work of the Office of Rulings and Agreements is also suffering from delays. Grant observed that some requests in this area can take more than 18 months to complete. EP, Grant said, is still working on the best means to improve efficiency in this area.
Grant said that he is also working to make better use of information technology to improve EP's practices. In addition, he said that the issuance of guidance still takes a long time and he would like to expedite that process. However, he reminded practitioners that the process of issuing guidance is done in coordination with the Treasury Department and IRS, Office of Chief Counsel, and, as such, is more time-consuming than other processes.
For more information on this and related topics, consult the CCH Pension Plan Guide.
Visit our News Library to read more news stories.
©2005-2024 CCH Incorporated or its affiliates
