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Employee Benefits > Determination Letter
The following information is about Determination Letter.
Determination Letter Defined
A letter issued by the Internal Revenue Service stating whether a retirement plan is a qualified plan, and if applicable whether it includes a qualified trust. Obtaining a favorable determination letter is not necessary although they are almost universally accepted as necessary or desirable. A favorable determination letter provides a high degree of protection to subsequent challenge by the IRS that the plan document was not adequate or qualified. The determination letter does not provide protection against defects in plan operation which can disqualify the plan.
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