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Pre-Approved IRAs

Prototype IRAs

  • As stated in Revenue Procedure 2010-48 , prototype IRAs do not need to amend for various law changes since 2002 for the trustee, custodian or issuer to take advantage of them. These “statutory changes” are listed in the revenue procedure.

  • A prototype IRA that does amend to incorporate the statutory changes may continue to rely on its favorable opinion letter.

  • A prototype sponsor may apply for an IRS opinion letter at any time, including after it amends solely to incorporate the statutory changes. The sponsor must submit the IRA document with Form 5306, Application for Approval of Prototype or Employer Sponsored Individual Retirement Arrangement (IRA).

  • To receive a favorable opinion letter, prototype IRAs must include every applicable issue listed in the Listing of Required Modifications (LRMs). Sponsors are encouraged to use the LRM language.

  • Prototype sponsors of individual retirement annuities that use one IRA endorsement with one or more annuity contracts may submit only the IRA endorsement (and not the contracts) for approval when applying for an opinion letter. If the IRS approves the application, it will issue a favorable opinion letter to the sponsor referencing the IRA endorsement. This change reduces sponsor user fees and the number of opinion letters the IRS issues.

  • Form 5306 includes a checkbox to identify a dual-purpose IRA application - in situations when an opinion letter is for a prototype document designed to be used as either a traditional IRA or a Roth IRA.

Model IRAs

Model IRAs do not need to amend for the statutory changes. The IRS expects to issue new model amendments for:

  • SIMPLE individual retirement annuity; and
  • traditional individual retirement annuity.

Although not required, the IRS recommends that the plan sponsor adopt the model’s latest form once these are available.

Page Last Reviewed or Updated: 03-Nov-2014