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Retirement Plans FAQs regarding Multiple Employer Plans

These frequently asked questions and answers provide general information and should not be cited as any type of legal authority. They provide the user with information responsive to general inquiries. Because these answers do not apply to every situation, yours may require additional research.

 


  1. Per the changes made to the determination letter program for Multiple Employer Plans by Announcement 2001-77, does each adopting employer have to come in for an individual determination letter?
  2. Is the submission cycle and Form to be filed affected by the conversion of a volume submitter specimen plan to a multiple-employer plan if the VS plan allows for the adoption by an unrelated employer and acknowledges that such an adoption would make it a multiple-employer plan?
  3. Are the adopting employers required to give Notice to Interested Parties if they are not coming in for individual letters?
  4. Do the employers maintaining the plan have reliance on the determination letter issued to the plan?

 

Per the changes made to the determination letter program for Multiple Employer Plans by Announcement 2001-77, does each adopting employer have to come in for an individual determination letter?

Under the old procedures, each employer maintaining the plan had to submit a Form 5300 application. Under the new procedures, the sponsors of the plan have two choices:

  1. Submit just for a determination letter on the plan; or
  2. Submit for letter on the plan and a letter for each employer maintaining the plan who wants an individual letter. Note: All adopting employers do NOT have to submit for a determination letter.

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Is the submission cycle and Form to be filed affected by the conversion of a volume submitter specimen plan to a multiple-employer plan if the VS plan allows for the adoption by an unrelated employer and acknowledges that such an adoption would make it a multiple-employer plan? 

Yes, the conversion of the VS plan to a multiple-employer plan would mean that the plan’s is on Cycle B and the plan must file Form 5300, Application for Determination for Employee Benefit Plan, instead of Form 5307.

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Are the adopting employers required to give Notice to Interested Parties if they are not coming in for individual letters?

Yes, this law does not change the "Notice to Interested Parties" requirement.

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Do the employers maintaining the plan have reliance on the determination letter issued to the plan?

Yes. Announcement 2001-77 states, "The employers will be able to rely on the favorable determination letter issued for the plan except with respect to the requirements of 401(a)(4), 401(a)(26), 401(l), 410(b) and 414(s) and, if the employer maintains or has ever maintained another plan, IRC 415 and 416".

It is important to remember that this modification of reliance procedures is subject to other limitations and conditions described in Section III of the announcement.

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Page Last Reviewed or Updated: 20-Aug-2014