Updated forms on Pay.gov for the Voluntary Correction Program; pre-approved cash balance plans
Internal Revenue Service (IRS) sent this bulletin at 06/28/2019 02:40 PM EDT
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Changes to forms used on Pay.gov for IRS Voluntary Correction Program submissions The IRS updated Forms 8950 and 8951 on Pay.gov used for Voluntary Correction Program (VCP) submissions.
Form 8950, Application for VCP Submission: Updates to the “Before you begin” landing page include:
Form 8950, page two - Penalty of Perjury Statement Revised the penalty of perjury statement to clarify:
Form 8951, Additional Payment for Open VCP Updates to the “Before you begin” landing page include:
Learn more about VCP at Correcting Plan Errors.
Pre-approved Second Cycle Cash Balance Plan - use of a lookback month and stability period when using a Treasury-based interest crediting rate Pre-approved Cash Balance plans were first permitted for the second Cycle. Announcement 2018-05 gives adopting employers of pre-approved plans Cash Balance until April 30, 2020, to restate their plans to be timely for the second Cycle. The Defined Benefit Listing of Required Modifications (LRM) Cash Balance Supplement provides language that meets the requirements of the pre-approved program. Section 26CB.I.B.4. of the LRM contains Treasury-based interest crediting rates for purposes of a cash balance plan’s hypothetical account. A plan is permitted to specify a look back month and stability period for purposes of determining the Treasury-based interest rate for the interest credit period; however, this is not currently addressed in the LRM. If a sponsor, practitioner, or employer amends their pre-approved cash balance plan to specify a look back month and stability period, reliance on the second cycle (PPA) opinion or advisory letter will not be jeopardized.
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