Determination, Opinion and Advisory Letter for Retirement Plans - Pre-Approved Plan Sponsors
A pre-approved plan sponsor creates a plan document to be adopted by many business owners with many identical plan document provisions.
Master and Prototype (M&P) Pre-Approved Plan Sponsors
- M&P Sponsor
A U.S. business that has at least 30 employer-clients expected to adopt the sponsor’s basic lead plan document. After the plan sponsor meets that requirement for at least one plan, it can request opinion letters for any number of basic plan documents and adoption agreements.
A sponsor that does not use a mass submitter plan has different procedural requirements to apply for an opinion letter. “Substantially identical” plans may receive expedited review, even if they are not mass submitter plans.
Sponsors must make reasonable and diligent efforts to ensure that adopting employers of its M&P plan have received and are aware of all plan amendments and that the employers complete and sign new adoption agreements when necessary.
- M&P Mass Submitter
A “mass submitter” of an M&P plan is a U.S. business that submits opinion letter applications on behalf of at least 30 unaffiliated “sponsors" that have “word-for-word identical” plans to the mass submitter’s lead plan. Mass submitters who have met the “30 sponsor” requirement can submit additional applications for sponsors with identical plans and sponsors that have “minor modifications” to the mass submitter’s plan. In addition, if the mass submitter has additional plans, it can submit applications regardless of the number of sponsors for the other mass submitter’s plan(s).
Volume Submitter (VS) Pre-Approved Plan Sponsors
- VS Mass Submitter
A U.S. business that submits advisory letter applications on behalf of at least 30 unaffiliated practitioners each of which is sponsoring, on a word-for-word identical basis, the same specimen plan. The 30 unaffiliated practitioner requirement has to be separately met for each specimen plan in order for a VS mass submitter to be treated as a mass submitter with respect to the plan. A VS mass submitter may submit an advisory letter application on its own behalf as one of the 30 unaffiliated practitioners.
Mass submitters have reduced procedural requirements and get expedited treatment from the IRS because of the high volume of sponsors they represent and the number of identical or near-identical plans they submit to the IRS.
- VS Practitioner
A U.S. business that has at least 30 employer-clients expected to adopt a plan that is substantially similar to the VS practitioner’s specimen plan. This requirement is lowered for a specimen money purchase pension plan if a practitioner has at least one other type of specimen plan that meets the 30 employer-client requirement. Then the practitioner only needs to have 10 employer-clients expected to adopt the money purchase pension plan.