The IRS has issued Rev. Proc. 2009-36 extending the remedial amendment cycle for governmental plans. The cycle is extended to the 91st day after the close of the first legislative session that begins more than 120 days after a determination letter is issued for the plan (or after the occurrence of certain other events relating to a determination letter application) provided that the application for the determination letter is timely submitted to the Service. The IRS indicates that it is extending the cycle because the normal period may not be enough time for governmental plans to adopt retroactive amendments due to the requirements of state law.
The Rev. Proc. also states formally what was already indicated in a Special Edition of the Employee Plan News issued last November about remedial amendment cycles for individually designed governmental plans. The Rev. Proc. provides that governmental plans may elect Cycle E, instead of Cycle C, as the initial remedial amendment cycle for the plan.