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403(b) Pre-Approved Plan Program FAQs - What is a Pre-Approved 403(b) Plan?

What types of plans may apply for a pre-approval letter under the 403(b) Pre-approved Plan Program?

Under the 403(b) Pre-approved Plan Program:

  • 403(b) prototype plans may apply for an opinion letter, and
  • 403(b) volume submitter plans may apply for an advisory letter, 

that the form of the plan documents satisfy the requirements of Internal Revenue Code Section 403(b), subject to certain restrictions.


What is a 403(b) prototype plan?

A defined contribution retirement plan designed to meet the requirements of Internal Revenue Code Section 403(b) that a prototype sponsor makes available for adoption by employers eligible to have 403(b) plans.

A 403(b) prototype plan consists of:

  • A basic plan document that contains all of the plan’s nonelective provisions that apply to all adopting eligible employers and that does not have any options or blanks, and
  • An adoption agreement that allows an adopting eligible employer to select among plan design alternatives available under the basic plan document to customize its plan.

Although a basic plan document can be used with more than one adoption agreement, an adoption agreement can be used with only one basic plan document. Each basic plan document and adoption agreement pair is considered one separate 403(b) prototype plan, even if there are multiple investment arrangements or vendors under the plan, and requires a separate application under the 403(b) Pre-approved Plan Program.

A 403(b)(9) retirement income account plan may be either a 403(b) prototype plan or a 403(b) volume submitter plan. It cannot be combined with non-403(b)(9) retirement income accounts, and requires a separate basic plan document. A 403(b)(9) retirement income account plan is a type of 403(b) plan available only to certain church-related organizations.

The IRS will only review the basic plan document and adoption agreement under the Program. Although an adopting employer may incorporate other documents in the prototype plan by reference (for example, annuity contracts and custodial account agreements), it can’t rely on the plan’s opinion letter regarding the terms incorporated from these other documents.


Will the 403(b) Pre-approved Plan Program include both standardized and non-standardized prototype plans?

Yes. 403(b) prototype plans must be either standardized or non-standardized.  Whether a 403(b) prototype plan is standardized or non-standardized has an impact on the scope of a plan’s opinion letter and employer reliance on the opinion letter.


What is a standardized 403(b) prototype plan?

A standardized 403(b) prototype plan allows employee salary deferrals. If it allows other types of contributions, the standardized 403(b) prototype plan must:

  1. State they will be made for all eligible employees.
  2. Make all benefits, rights, and features of the plan available to all benefiting employees.
  3. Have provisions for allocating employer nonelective contributions that meet IRC Section 401(a)(4) design-based safe harbor provisions.
  4. Define compensation as required by the Program.

What is a non-standardized 403(b) prototype plan?

A non-standardized 403(b) prototype plan is a plan that doesn’t meet the requirements to be a standardized plan.

For example, a 403(b) prototype plan that allows the adopting employer to select (in the adoption agreement) a method for allocating nonelective employer contributions that isn't an IRC Section 401(a)(4) design-based safe harbor.


What is a 403(b) volume submitter plan?

It’s a defined contribution retirement plan that meets IRC Section 403(b) requirements that consists of:

  • a specimen plan, which is a model plan document (as opposed to the actual plan of an employer), and
  • an adoption agreement, if applicable.

An eligible employer's actual plan must be substantially similar to the volume submitter plan sponsor's pre-approved specimen plan.

A specimen plan may include an adoption agreement but is not required to have one. If the volume submitter plan is designed to include an adoption agreement and more than one adoption agreement may be used with the specimen plan, each specimen plan and adoption agreement pair is considered one separate 403(b) volume submitter plan, and requires a separate application under the Program.

If an adoption agreement is used for a volume submitter plan, it must satisfy the prototype plan adoption agreement rules.

A 403(b)(9) retirement income account plan may be either a 403(b) volume submitter plan or a 403(b) prototype plan.  It cannot be combined with non-403(b)(9) retirement income accounts, and thus requires a separate specimen plan. A 403(b)(9) retirement income account plan is a type of 403(b) plan available only to certain church-related organizations.

The IRS will only review the specimen plan (and adoption agreement, if included) under the Program. Although an adopting employer may incorporate other documents in the volume submitter plan by reference (for example, annuity contracts or custodial account agreements), it  can’t rely on the plan’s advisory letter regarding the terms incorporated from these other documents.

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Page Last Reviewed or Updated: 03-Dec-2014