HomeMy WebLinkAbout20100374 INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
P. O. BOX 2508
CINCINNATI, OH
OH 45201
FEB
Date: r[p G S- LOO Employer Identification Number:
84-6000813
DLN:
17007029057009
WELD COUNTY Person to Contact:
915 10TH ST YOLANDA NAJERA ID# 95083
GREELY, CO 80631 Contact Telephone Number:
(626) 312-3622
Plan Name:
WELD COUNTY 401K SAVINGS PLAN
Plan Number: 005
Dear Applicant:
_ We have made a favorable determination on the plan identified above based
on the information you have supplied. Please keep this letter, the application forms submitted to request this letter and all correspondence with the Internal
Revenue Service regarding your application for a determination letter in your
permanent records. You must retain this information to preserve your reliance
on this letter.
Continued qualification of the plan under its present form will depend
on its effect in operation. See section 1.401-1(b) (3) of the Income Tax
Regulations. We will review the status of the plan in operation periodically.
The enclosed Publication 794 explains the significance and the scope of
this favorable determination letter based on the determination requests
selected on your application forms. Publication 794 describes the information
that must be retained to have reliance on this favorable determination letter.
The publication also provide examples of the effect of a plan's operation on
its qualified status and discusses the reporting requirements for qualified
plans. Please read Publication 794.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal
or local statutes.
This determination letter gives no reliance for any qualification change
that becomes effective, any guidance published, or any statutes enacted, after
the issuance of the Cumulative List (unless the item has been identified in the
Cumulative List) for the cycle under which this application was submitted.
This letter may not be relied on after the end of the plan's first
five-year remedial amendment cycle that ends more than 12 months after the
application was received. This letter expires on January 31, 2014. This letter
considered the 2007 Cumulative List of Changes in Plan Qualification
Requirements.
This determination letter is applicable for the amendment(s) executed
Letter 2002 (DO/CG)
2010-0374
C', ni a- 7-aaLID PEbD10
2
WELD COUNTY
on 12-17-01, 10-27-03.
This determination letter is also applicable for the amendment(s) dated
on 3-16-05, 8-6-08.
This determination letter is also applicable for the amendment(s) dated on
8-2-06, 4-6-05.
This determination letter is based solely on your assertion that the plan
is entitled to be treated as a Governmental plan under section 414(d) of the
Internal Revenue Code.
The information on the enclosed addendum is an integral part of
this determination. Please be sure to read and keep it with this letter.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely,
Andrew S. Zuckerman
Director, EP Rulings & Agreements
Enclosures:
Publication 794
Addendum
Letter 2002 (DO/CG)
-3-
WELD COUNTY
This determination letter applies to the amendments adopted on 12-5-01 and
12-17-07.
Letter 2002 (DO/CG)
r�{ (Rev.Publication 794Introduction
(Rev. April 2009) This publication explains the significance of
Catalog Number 20630M your favorable determination letter,points
out some features that may affect the
Department qualified status of your employee
of the retirement plan and nullify your
Treasury determination letter without specific notice
Internal from us,and provides general information
Revenue
on the reporting requirements for your
Service
plan.
Favorable Significance of a Favorable
Determination An emplloeearefrrem retirement Letter
nrqualified
under Internal Revenue Code(IRC)
Letter section 401(a)(qualified plan)is entitled to
favorable tax treatment.For example,
contributions made in accordance with the
plan document are generally currently
deductible.However,participants will not
include these contributions into income
until the time they receive a distribution
from the plan,at which time special Income
averaging rates for lump sum distributions
may serve to reduce the tax liability.In
some cases,taxation may be further
deferred by rollover to another qualified
plan or individual retirement arrangement.
(See Publication 575,Pension and Annuity
Income,for further details.)Finally,plan
earnings may accumulate free of tax.
Employee retirement plans that fail to
satisfy the requirements under IRC section
401(a)are not entitled to favorable tax
treatment.Therefore,many employers
desire advance assurance that the terms of
their plans satisfy the qualification
requirements.
The Internal Revenue Service provides
such advance assurance by means of the
determination letter program.A favorable
determination letter indicates that,in the
opinion of the Service,the terms of the
plan conform to the requirements of IRC
section 401(a).A favorable determination
letter expresses the Service's opinion
-- regarding the form of the plan document,
However,to be a qualified plan under IRC
section 401(a)entitled to favorable tax
treatment,a plan must satisfy,in both form
and operation,the requirements of IRC
section 401(a),including nondiscrimination
and coverage requirements.A favorable
determination letter may also provide
assurance,on the basis of information and
demonstrations provided in your
application,that the plan satisfies certain of
these nondiscrimination and coverage
requirements in form or operation.See the
following topic,Limitations and Scope of a
Favorable Determination Letter,for more
details.
Limitations and Scope of a In addition,the following apply business requirements of IRC section
Favorable Determination generally to all determination letters: 414(r)).
Letter • If you maintain two or more • The determination letter applies only
A favorable determination letter is retirement plans,some of which were to the employer and Its participants on
limited In scope.A determination letter either not submitted to the Service for whose behalf the determination letter
generally applies to qualification determination or not disclosed on each was Issued.
requirements regarding the form of the application,certain limitations and
plan.A determination letter may also requirements will not have been • A determination letter does not
apply to certain operational(non-form) considered on an aggregate basis. express an opinion whether disability
requirements. Therefore,you may not rely on the benefits or medical care benefits are
determination letter regarding the plans acceptable as accident or health plan
Generally,a favorable determination when considered as a total package. benefits deductible under IRC section
letter does not consider,and may not 105 or 106.
be relied on with regard to: • A determination letter for a defined
• certain requirements under IRC benefit plan may be relied on regarding • A determination letter does not
section 401(a)(4),Including the the requirements of IRC section express an opinion on whether
requirement that the plan be 401(a)(26)if the application requested contributions made to a plan treated as
nondiscriminatory in the amounts of a determination regarding section a governmental plan defined In IRC
contributions or benefits for highly 410(6). section 414(d)constitute employer
compensated and nonhighly contributions under IRC section
compensated employees; • A determination letter does not 414(h)(2).• the coverage requirements under consider the special requirements
IRC sections 410(6)and 401(a)(26); relating to:(a)affiliated service groups; You should become familiar with the
and (b)leased employees;or(c)plan terms of the determination letter.
• the definition of compensation under assets or liabilities Involved In a Please call the contact person listed on
IRC section 414(s). merger,consolidation,spin-off or the determination letter if you do not
transfer of assets with another plan understand any terms in your
In addition,a favorable determination unless the letter includes a statement determination letter.
letter may not be relied on for any that the requirements of IRC section
qualification changes that become 414(m)(affiliated service groups)or Retention of information.Whether a
effective,any guidance published,or 414(n)(leased employees)has been plan meets the qualification
any statutes enacted,after the considered. requirements Is determined from the
issuance of the applicable Cumulative information In the written plan
List of Changes In Plan Qualification • No determination letter may be relied document,the application form end the
Requirements(Cumulative List)unless on with respect to the effective supporting information submitted by the
the item has been identified in that availability of benefits,rights,or employer.Therefore,you must retain
Cumulative List for the cycle under features under the plan.(See section copies of any demonstrations or
which the application was submitted. 1.401(a)(4)-4(c)of the Income Tax other information submitted with
See section 4 of Revenue Procedure Regulations.)Reliance on whether your application.Such
(Rev.Proc.)2007-44,2007-28 I.R.B. benefits,lights,or features are demonstrations determine the extent
54. currently available to a of reliance provided by your
nondiscriminatory group of employees determination letter.Failure to retain
However,if you requested one or more is provided to the extent requested in such Information may limit the
of the optional nondiscrimination and the application. scope of reliance on issues for
coverage determinations offered on the which demonstrations were
determination letter application forms • A determination letter does not provided.
(Form 5300,Form 5307,Schedule Q), consider whether actuarial assumptions
your favorable determination letter are reasonable for funding or deduction Other conditions for reliance.We
considers,and may be relied on,with purposes or whether a specific have not verified the information .
regard to the specific determination(s) contribution is deductible. submitted with your application.The
you requested,provided you satisfy the determination letter will not provide
following requirement:you must retain • A determination letter does not reliance if:
copies of the application forms,any consider,and may not be relied on with
required demonstrations,and all respect to,certain other matters (1)there has been a misstatement or
correspondence with the Internal described in section 5 of Rev.Proc. omission of material facts(for
Revenue Service related to the 2009-6,2009-1 I.R.B.189(i.e.,whether example,the application Indicated
application for a favorable a plan amendment is part of a pattern that the plan was a govemmental
determination letter.A favorable of amendments that significantly plan and it was not a governmental
determination letter cannot be relied discriminates in favor of highly plan);
on with regard to anv optional compensated employees;the use of
determination request unless all of the substantiation guidelines contained (2)the facts subsequently developed are
the required information is retained. in Rev.Proc.93-42,1993-31 I.R.B.32; materially different than the facts on
and certain qualified separate lines of which the determination was made;or
(3)there Is a change in applicable law. Plan Must Qualify in plan,the method used to test that this
Operation
requirement continues to be satisfied is
Law changes affecting the plan.A Generally,a planqualifies In operation
changed(or Is required to be changed
determination issued to an adopting y D because the facts have changed)from
employer of an Individually designed if it continues to satisfy the coverage the method employed in the
plan will be based on the most recent and nondiscrimination requirements demonstration,the letter may no longer
Cumulative List published prior to the and is maintained according to the be relied upon with respect to this
one-year period starting February 1 and terms on which the favorable requirement.
ending January 31 in which the determination letter was issued.
determination letter application was Changes In facts and other basis on CoMributiona or benefits In excess
filed.The Cumulative List is a list which the determination letter wee of the limitations under IRC section
published annually by the Service issued may mean that the 415.A retirement plan may not provide
which identifies on a year-by-year basis determination letter may no longer be retirement benefits or,In the case of a
all changes in the qualification relied upon. defined contribution plan,contributions
requirements resulting from statute Some of effect of a plan's and other additions,that exceed the
changes,regulations,or other guidance operation on a examplesf of the ta determination limitations specifie IRC section 415.
published in the Internal Revenue Your Ian contains provisions designed
Bulletin that are required to be taken are: to provide benefits within these
into account in the written plan limitations.Please become familiar with
document.See sections 4,13,and 14 Not meeting iremennondiscrif the ion in these limitations,or your plan will be
of Rev.Proc.2007-44 for further amount requirement.If the disqualified If these limitations are
details.Generally,a determination determination letter tion exceeded.
letter issued to an adopting employer of requested a determination that the plan .
a pre-approved plan(i.e.,Master& satisfies the nondiscrimination In Top heavy minimums.If this plan
Prototype(M&P)planar volume amount requirement of section primarily benefits employees who are
submitter(VS)plan)will be based on 1.401(a)(4)-1(b)(2)of the regulations on key employees,it may bee top heavy
the Cumulative Ust used by the Service the basis of a design-based safeharbor,the plan will generally continue plan and must provide certain minimum
in reviewing the pm-approved plan. benefits and vesting for non-key
to salisfythis is requirement in operation
However,see section 19 of Rev.Proc. if theplan is maintained according to Its employees.If your plan provides the
2007-44 for exceptions to this rule.For accelerated benefits and vesting only
terms.If the determination letter
terminating plans,a determination letter application requested a determination for years during which the plan Is top
Is based on the law in effect at the time that the plan satisfies the heavy,failure to identify such years and
of the plan's proposed date of nondiscrimination in amount to provide the accelerated vesting end
termination.See Section 8 of Rev. benefits will disqualify the plan.
requirement on the basis of a
Proc.2007-44. nondesi n-based safe harbor or a
9 Actual deferral percentage or
Amendments to the plan.A favorable general test,and the plan subsequently contribution percentage tests.If this
determination letter issued to an fails to meet this requirement In plan provides for cash or deferred
on
individually designed plan will provide letter operation,the favorable relieddete upon with
employer matching
reliance up to and Including the letter may no longer be upon with contributions,or employee
expiration date identified on the respect to this requirement. contributions,the determination letter
determination a letter.This reliance is Not meeting minimum coverage does not consider whether special
conditioned upon the timely adoption of g discrimination tests described in IRC
any necessary interim amendments as req r application Includes a request for been satisfied in operation.However,
deter 007-04.A favorable a tiontest regarding the ratio
10 the letter considers whether the terms
determination letter issued to an percentage test of IRC section 410(b) of the plan satisfy the section 401(k)(3)
adopting employer of a preapproved up to an and the plan subsequently fella to or 401(m)(2)requirements specified in
plan will provide reliance up to and satisfythe ratio percentage test In IRC section 401(k)(3)or.401(m)(2).
Including the last day of the six-year operation,the letter may no longer be
relied upon with respect to the
cycle following the six-year remedial coverage requirements.Likewise,if the Reporting Requirements
amendment cycle in which the Most plan administrators or employers
determdetermination letter application was requests inetlon letter application who maintain en employee benefit plan
filed.The reliance is conditioned upon a ndet t test,the regarding the must file an annual return/report.The
the timely adoption of any necessary average benefit test,the letter may no following is a general discussion of the
longer
interim amendments as required by be relied upon respect to forms to be used for this purpose.See .
section 5.04 of Rev.Proc.2007-44. the coverage requirements once the the instructions to each form for specific
Also see Rev.Proc.2005-16,2005-10 Plan fails to satisfy the average benefit information:
I.R.B.674 sections 5.01 and 15.05 and test in operation.
Announcement 2005-37,2005-21 Changes in testing methods.If the Form 5500-F2,Annual Return of
I.R.B.1096. determination letter is based in part on One-Participant(Owners and Their
a demonstration that a coverage or Spouses)Retirement Plan—generally
nondiscrimination requirement is for a"one-participant plan,"which is a
satisfied,and,in the operation of the plan that covers only: (1)an individual,
or an individual and his or her spouse
who wholly own a business,whether person)are prohibited,unless almost any employer reversion of plan
incorporated or not;or(2)partner(s)in specifically exempted from this assets.Form 5330 must be filed by the
a partnership or the partner(s)and the requirement.A few examples are loans, last day of the month following the
partner's spouse. sales and exchanges of property, month In which the reversion occurred.
leasing of property,furnishing goods or
If the Form 5500-EZ cannot be used, services,and use of plan assets by the Form 5310-A for certain transactions
the one-participant plan should use disqualified person.Disqualified -Under IRC section 6058(b),an
Form 5500,Annual Return/Report of persons who engage in a prohibited actuarial statement is required at least
Employee Benefit Plan. transaction for which there is no 30 days before a merger,consolidation,
exception must file Form 5330 by the or transfer(including spin-off)of assets
See Instructions to Form 5500-EZ for last day of the seventh month after the to another plan.-This statement is
specific rules. end of the tax year of the disqualified required for all plans.However,
person. penalties for non-filing will not apply to
•
Note: A"one-participant'plan that has defined contribution plans for which:
no more than$250,000 In assets at the Form 5330 for tax on nondeductible
end of the plan year Is not required to employer contributions to qualified (1)The sum of the account balances in
file a return.However,Form 5500-EZ plans-If contributions are made to this each plan equals the fair market
must be filed for any subsequent year plan in excess of the amount value of all plan assets,
in which plan assets exceed$250,000. deductible,a tax may be imposed upon (2)The assets of each plan are
If two or more one-participant plans the excess contribution.Form 5330 combined to form the assets of the
have more than$250,000 in assets,a must be filed by the last day of the plan as merged,
separate Form 5500-EZ must be filed seventh month after the end of the (3)Immediately after a merger,the
for each plan. employers tax year. account balance of each participant
is equal to the sum of the account
A°Final"Form 5500-EZ must be filed if Form 5330 for tax on excess balances of the participant
the plan Is terminated. contributions to cash or deferred immediately before the merger,and
arrangements or excess employee (4)The plans must not have an
Form 5500,Annual Return/Report of contributions or employer matching unamortized waiver or unallocated
Employee Benefit Plan-for a contributions-If a plan includes a suspense account.
pension benefit plan that is not eligible cash or deferred arrangement(IRC
to file Form 5500-EZ. - section 401(k))or provides for Penalties will also not apply if the
employee contributions or employer assets transferred are leas than three
Note.Keogh(H.R.10)plans having matching contributions(IRC section percent of the assets of the plan
over$250,000 in assets are required to 401(m)),then excess contributions that involved In the transfer(spinoff),and
file an annual return even if the only would cause the plan to fall the actual . the transaction is not one of a series of
participants are owner-employees.The deferral percentage or the actual two or more transfers(spinoff
term"owner-employee"includes a contribution percentage test are subject transactions)that are,in substance,
partner who owns more than a 10% to a tax unless the excess is eliminated one transaction.
interest in either the capital or profits of within 2%months after the end of the
the partnership.This applies to both plan year.Form 5330 must be filed by The purpose of the above discussions
defined contribution and defined benefit the due date of the employer's tax is to illustrate some of the principal
plans. return for the plan year in which the tax filing requirements that apply to
was incurred. pension plans.This is not an exclusive
Form 5330 for prohibited listing of all returns and schedules that
transactions•Transactions between a Form 5330 for tax on reversions of must be filed.
plan and someone having a plan assets-Under IRC section 4980,
relationship to the plan(disqualified a tax is payable on the amount of
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