7.11.4  IRC 401(a) Pre-Approved Plans Program

Manual Transmittal

January 26, 2015

Purpose

(1) This transmits revised IRM 7.11.4, Employee Plans Determination Letter Program, IRC 401(a) Pre-Approved Plans Program.

Material Changes

(1) This IRM is updated to reflect current versions of annual revenue procedures.

(2) This IRM is updated to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010. The Act provides that writing must be clear, concise, well-organized, and follow other best practices appropriate to the subject or field and intended audience.

(3) IRM 7.11.4.2, Submitting a Pre-Approved Plan, is updated to reflect the physical address in addition to the post office box address for submitting pre-approved plans.

(4) IRM 7.11.4.2.2, Off-Cycle Word-for-Word Identical Adopters, is deleted because it is a repeat of information already provided in IRM 7.11.4.2.1, Late Submissions. Subsequent sections are renumbered.

(5) IRM 7.11.4.6.1, Developing and Conducting Training, is added. Subsequent sections are renumbered.

Effect on Other Documents

IRM 7.11.4, dated July 16, 2013, is superseded.

Audience

Tax Exempt and Government Entities (TE/GE) Employee Plans Personnel

Effective Date

(01-26-2015)

Robert S. Choi
Director, Employee Plans
Tax Exempt and Government Entities

7.11.4.1  (04-04-2012)
Overview of the Pre-Approved Plans Program

  1. The Pre-Approved Plans Program is responsible for administering and processing opinion and advisory letter applications from Master and Prototype (M&P) sponsors and Volume Submitter (VS) practitioners. This IRM provides procedures and guidance to employees who process and review these applications:

    1. Pre-Approved Plans Program clerk (clerk)

    2. First and Second Level Reviewers in the Pre-Approved Cadre (cadre)

    3. Pre-Approved Plans Coordinators (coordinators)

    4. Manager, Pre-Approved Plans Program

  2. Rev. Proc. 2011-49, 2011-44 IRB 608 which modifies and supersedes Rev. Proc. 2005-16, 2005-10 IRB 674, describes the Master & Prototype (M&P) and Volume Submitter (VS) programs, collectively referred to as the Pre-Approved Plans Program. Rev. Proc. 2007-44, 2007-28 IRB 54 gives additional information on this program.

7.11.4.2  (01-21-2015)
Submitting a Pre-Approved Plan

  1. Advisory or opinion letter requests are filed on:

    • Form 4461, Application for Approval of Master or Prototype or Volume Submitter Defined Contribution Plans.

    • Form 4461-A, Application for Approval of Master or Prototype or Volume Submitter Defined Benefit Plan.

    • Form 4461-B, Application for Approval of Master or Prototype or Volume Submitter Plans (Mass Submitter Adopting Sponsor or Practitioner).

  2. Applications are mailed to the EP Determinations Pre-Approved Plans Program at:

    Mailing Address Express Mail or a delivery service
    Internal Revenue Service
    P.O. Box 2508
    Cincinnati, OH 45201
    Attn: Pre-Approved Plans Coordinator
    Room 5106, Group 7521
    Internal Revenue Service
    550 Main Street
    Cincinnati, OH 45202
    Attn: Pre-Approved Plans Coordinator
    Room 5106, Group 7521
  3. Pre-approved plans have a six-year remedial amendment/approval cycle (RAC) as explained in Rev. Proc. 2007-44 section 16. The IRS uses the second and third years of the six-year cycle to review the plans for their compliance with IRC 401(a). The table below lists the types of applications and the general deadline to submit an application.

    Type of Application: General Deadline for Submission:
    Non-mass submitter. January 31st of the calendar year after the particular defined contribution (DC) or defined benefit (DB) six-year RAC opens
    Word-for-word identical adopters and placeholder applications for minor modifiers. January 31 of the calendar year after the particular DC or DB six-year RAC opens
    Mass submitter plans. October 31 of the calendar year in which the particular DC or DB six-year RAC opens

    See Exhibit 7.11.4-1, Definitions, and Rev. Proc. 2011-49 for an explanation of the terms used in this paragraph.

  4. VS plan advisory letter applications and M&P plan opinion letter applications must include:

    1. Applicable user fee as described in Rev. Proc. 2014-8, 2014-1 IRB 242, (revised annually)

    2. Form 8717-A, User Fee for Employee Plan Opinion or Advisory Letter Request

    3. Form 2848, Power of Attorney and Declaration of Representation, if applicable

    4. Form 4461 series

    5. Attachment I (DC) or Attachment I-A (DB)

    6. Cover letter

    7. Plan Document

    8. Adoption Agreement (applicable to M&P plans and possibly to a VS plan)

    9. Trust Agreement

    10. Certification Regarding Interim Amendments

7.11.4.2.1  (01-21-2015)
Late Submissions

  1. M&P sponsors or VS practitioners with valid opinion/advisory letters from the immediately preceding six-year cycle are expected to submit applications for each particular (DC or DB) six-year RAC on time. The same holds true for a new M&P sponsor or new VS practitioner unless that sponsor or practitioner didn’t exist during the particular submission period.

  2. If M&P sponsors or VS practitioners don't submit by the scheduled due date, it could result in a delay in the IRS processing the application and subsequently issuing a favorable letter.

  3. An employer adopting a late submitted plan could have less than the normal two year adoption period. See Rev. Proc. 2011-49, section 21.03, Rev. Proc. 2007-49, 2007-30 IRB 141 and Rev. Proc. 2008-56, 2008-40 IRB 826 for more details on off-cycle submissions.

  4. Once the two-year period starts for employers to adopt and submit determination letter applications for a particular (DC or DB) six-year RAC, the Pre-Approved Plans Program will not accept late submissions except for off-cycle word-for-word M&P and VS plan applications (i.e., Forms 4461-B) described in Rev. Proc. 2011-49, section 21.03.

7.11.4.2.2  (01-21-2015)
Impermissible Plan Types

  1. The Pre-Approved Plans Program is not open for all types of plans. Rev. Proc. 2011-49, sections 6.02 and 6.03 discuss situations for which the IRS won’t issue opinion letters. Rev. Proc. 2011-49, sections 16.02 and 16.03 discuss situations for which the IRS won’t issue advisory letters.

7.11.4.2.3  (01-21-2015)
Issuance of Opinion and Advisory Letters

  1. The IRS will publish an announcement giving the date that adopting employers must adopt the newly approved plans.

  2. The date will be a uniform date that will apply to all adopting employers.

7.11.4.2.4  (01-21-2015)
Expediting the Issuance of Opinion and Advisory Letters in Certain Instances

  1. If a sponsor or practitioner wishes to expedite the IRS issuing an opinion or advisory letter for the situations described in IRM 7.11.4.8.2, Assumption of Sponsorship or IRM 7.11.4.2.1, Late Submissions, paragraph four, they should submit user fees by a cashier's check or certified check made payable to the United States Treasury. Paying the user fee with a business or personal check will delay the IRS issuing the letter by approximately four to six weeks.

7.11.4.2.5  (01-21-2015)
Minor Modifiers

  1. A minor modifier is a plan which only has a minor change to an otherwise word-for-word identical plan of the M&P mass submitter. These plans don't require an in-depth technical review.

  2. The mass submitter sponsor submits the first page of the Form 4461-B as a placeholder and when the mass submitter plan receives its preliminary email (See IRM 7.11.4.6.5, Preliminary Emails), the sponsor prepares a plan document for each minor modifier application and submits them to the IRS according to Rev. Proc. 2011-49, section 12.03 paragraph two.

  3. The first level reviewer who reviewed the mass submitter lead plan will be assigned the minor modifier applications.

  4. The reviewer only reviews the changes differing from the lead plan. If the reviewer determines the changes are not minor, review will be suspended and the applicant will be given the opportunity to file as a non-mass submitter lead plan.

  5. Typically, the minor modifiers don't go through the second or third level review process.

7.11.4.3  (01-21-2015)
Duties of the Pre-Approved Plans Clerical Staff

  1. The Pre-Approved Plans Program clerk assists in the management of the case flow.

  2. Clerk duties include:

    1. Establishing inventory records.

    2. Transmitting the user fee.

    3. Preparing tracking sheet and case file.

    4. Assigning/transferring cases.

7.11.4.3.1  (01-21-2015)
Establishing the M&P and VS Records

  1. As soon as the clerk receives the application, the clerk creates a record of it on the TE/GE Rulings and Agreements Control System (TRAC). The clerk must enter the following information into the system:

    1. Sponsor/Practitioner name and address

    2. Employer Identification Number (EIN)

    3. Applicable user fee year

    4. Fee type

    5. Check information

    6. Special comments, if any

    7. Plan name, plan number, plan form, and plan type

    8. Power of attorney (POA) info., if any

    9. Control date

7.11.4.3.2  (04-04-2012)
Transmitting User Fee to Covington

  1. After inputting the information, the clerk prints the TRAC screen and makes one copy of each check.

  2. The clerk prepares a Form 3210, Document Transmittal listing:

    1. The number of checks, if more than one.

    2. Each check number and corresponding EIN.

  3. The clerk creates four copies of each Form 3210.

  4. The clerk attaches the actual checks and copies of the TRAC user fee screens to copies one and three of the Form 3210 and puts this package into an envelope and seals it.

  5. The clerks puts the sealed envelope into an interdepartmental folder and mails it to Covington so that the checks can be processed and deposited. The mailing address for Covington is:

    Internal Revenue Service
    201 West Rivercenter Blvd.
    Attn: Extracting Stop 312
    Covington, KY 41011

  6. The Forms 3210 are eventually returned from Covington and the clerk places them in the user fee master file binder.

  7. The clerk puts copies two and four of the Form 3210, along with copies of checks, into the user fee master file binder maintained by the coordinators in Cincinnati.

  8. The clerk puts a copy of the check in the applicable pre-approved plan case file with the banking information sanitized.

  9. Checks should not be held unprocessed for more than three days.

7.11.4.3.3  (01-21-2015)
Preparing Tracking Sheet

  1. Once the TRAC record and case number are created and the user fee is transmitted, the clerk prepares the tracking sheet (See IRM 7.11.4.5.3, Tracking Sheet) and attaches it to the front of the case file.

  2. The clerk also writes the TRAC case number on the outside of the case file. The case is now ready to be assigned to a first level reviewer.

7.11.4.3.4  (04-04-2012)
Case Transfers/Assigning Cases

  1. The clerk assigns/transfers pre-approved plan cases when necessary, to reviewers and/or coordinators.

7.11.4.3.4.1  (01-21-2015)
First Level Case Assignment

  1. When the coordinators are ready to assign the case to a first level reviewer, the clerk updates the case record in TRAC indicating the first level reviewer's number and the "first level review" status code.

  2. The clerk prints the TRAC screen and inserts it into the case file. The clerk then sends the case to the first level reviewer by mail (if applicable) and notifies him/her in an email of the case assignment.

7.11.4.3.4.2  (01-21-2015)
Second Level Case Assignment

  1. When the clerk receives a case file from a first level reviewer, the clerk acknowledges receipt by annotating the Form 3210 with the receipt date and initials. The clerk returns the original to the first level reviewer and updates the TRAC record to the "awaiting assignment for second level review" status code. The clerk prints the TRAC screen and inserts the printout into the case file.

  2. The clerk files the case.

  3. When the coordinators are ready to assign the case to a second level reviewer, the clerk updates the case record in TRAC indicating the second level reviewer's number and the "assigned to second level reviewer" status code. The clerk prints the TRAC screen and inserts it into the case file.

  4. The clerk sends the case to the second level reviewer by mail (if applicable) and notifies him/her in an email of the case assignment.

7.11.4.3.4.3  (01-21-2015)
Case Assigned Both First and Second Level

  1. Once a case file is assigned to both a first level reviewer and a second level reviewer, it is not returned to the coordinators until it is complete.

  2. The first and second level reviewers send the case back and forth between each other. When cases are moving back and forth between the first and second level reviewers, the applicable reviewer should notify the clerk in an email. The clerk updates the case record on TRAC to reflect the change in reviewer's number and indicate first or second level review status.

7.11.4.3.4.4  (01-21-2015)
Review and Issuance of the Opinion/Advisory Letter

  1. After review is complete, the case is returned to the coordinators for third level review and eventual issuance of the opinion or advisory letter. The clerk updates the case on TRAC to reflect the case is in third level review and puts it in the coordinator’s TRAC number.

  2. The clerk prints the TRAC screen and inserts it into the case file.

7.11.4.3.4.5  (01-21-2015)
Case Closing

  1. After the coordinators review the case file and send an email giving preliminary approval (See IRM 7.11.4.6.5, Preliminary Emails), the clerk updates the case in TRAC as follows:

    1. Changes the status code.

    2. Enters the preliminary email date.

    3. Enters the sum of the total hours from the first and second level reviewer.

  2. The clerk prints the TRAC screen and inserts it into the case file. The case is then shelved to wait for the opinion or advisory letter to be issued.

7.11.4.4  (04-04-2012)
Case Processing Procedures for Cadre Members

  1. Applications for pre-approved plans are only worked by specialists in the Pre-Approved Plans Cadre. The cadre is comprised of designated grade 12 and 13 EP Specialists from the various EP Determination groups. All lead plans go through a first level of review with a specialist and then a second level of review with another specialist. All grade 12 specialists work as first level reviewers and all grade 13 specialists perform first or second level of review at the direction of the Manager, Pre-Approved Plans Program.

  2. To ensure consistency, all of the same VS practitioner's lead plans and all of the same M&P sponsor's lead plans are assigned to one reviewer.

  3. Some organizations maintain both VS and M&P plans. In this instance, two reviewers are paired to review all of the organization’s lead plans. One reviewer is assigned as the first level reviewer for the VS plans and the second level reviewer for the M&P plans. The other reviewer is assigned as the first level reviewer for the M&P plans and the second level reviewer for the VS plans.

  4. The first and second level reviewers email the coordinators when they need work. The coordinators assign all work.

7.11.4.4.1  (01-21-2015)
First Level Review Process

  1. When the first level reviewer physically receives the case(s) from the clerk, he/she must complete the following as part of his/her initial review:

    1. Update the time sheet (WebETS) and the pre-approved plans monthly report. (See IRM 7.11.4.5.4, Monthly Report.)

    2. Prepare a case assignment letter and mail to the practitioner/sponsor. See the Pre-Approved folder on the shared server for a template of the letter. Update the letter to list your name and contact information.

    3. Complete Form 5464-A, Case Chronology Record. You can complete one Form 5464-A for each case file or one master Form 5464-A for the entire M&P sponsor’s or VS practitioner’s case files. Include your name and phone number. Under the section "Topics Discussed, Information Requested or Other Action Taken," enter "assigned for first level review" as the first entry. When you have more than one page, number each page accordingly.

    4. Complete your VS or M&P review using the applicable Cumulative List and the applicable Listing of Required Modifications (LRMs). Your review must include: Form 4461 series application, the cover letter, any plan documents, adoption agreements, and trust agreements. Complete the applicable Alert Guidelines whenever the plan doesn’t follow the LRM (most VS plans don’t follow the LRM so complete worksheets for them.)

    5. When you complete all case files for a certain VS practitioner or M&P sponsor, prepare a draft Letter 1196 to request any additional information. Clearly explain each change request or comment and provide the appropriate authoritative citation.

    6. When you complete the draft Letter 1196: prepare a Form 3210 with the notation "case is ready for assignment to a second level reviewer," mail the files to the clerk, send an email to the clerk informing them of the mailing and include in the email the plans’ names and the TRAC case numbers.

  2. Upon receipt of the case files, the clerk acknowledges receipt by annotating the Form 3210 with the receipt date and his/her initials. He/she returns the original to the first level reviewer and forwards the cases to the second level reviewer.

  3. The second level reviewer then begins his/her review of the case(s) as described in IRM 7.11.4.4.2, Second Level Review Process. When the second level reviewer has completed his/her initial review, the case(s) are returned directly back to the first level reviewer for additional review.

    1. When the first level reviewer receives the case(s) back from the second level reviewer, he/she reviews the second level comments and appropriately incorporates them into the draft 1196 letter.

    2. Discuss any disagreements or questions relative to the comments with the second level reviewer by phone or email.

    3. Once all comments are agreed upon, finalize the draft 1196 letter and mail it to the sponsor/practitioner with a 30 day response period. The first level reviewer, at his or her discretion, may grant an extension of the response time.

    4. The case files remain with the first level reviewer until the plan is perfected (ready for closure in the reviewer's opinion). Secure a final clean copy of the plan upon finalization of all amendments.

  4. When the plan is perfected, the first level reviewer sends the case(s) back to the second level reviewer with a Form 3210. Update the tracking sheet to reflect that the case(s) are being sent for final second level review and send an email to the clerk and the second level reviewer with the case name(s) and the TRAC case number(s) informing them of movement.

7.11.4.4.2  (01-21-2015)
Second Level Review Process

  1. The second level reviewer receives his/her case(s) from the clerk after the first level reviewer completes his/her initial review. When the second level reviewer physically receives the case(s) from the clerk, he/she must complete the following as part of his/her initial review:

    1. Update the time sheet (WebETS) and the pre-approved plans monthly report. (See IRM 7.11.4.5.4, Monthly Report.)

    2. Prepare a case assignment letter and mail to the practitioner/sponsor. See the Pre-Approved folder on the shared server for a template of the letter. Update the letter to list your name and contact information.

    3. Complete a Form 5464-A, Case Chronology Record. You can complete one Form 5464-A for each case file or one master Form 5464-A for the entire M&P sponsor’s or VS practitioner’s case files. Your Form 5464-A should be separate from the first level reviewer’s Form 5464-A. Include your name and phone number. Under the section "Topics Discussed, Information Requested or Other Action Taken" , enter "assigned for second level review" as the first entry. When you have more than one page, number each accordingly.

    4. For both VS plan and M&P plan reviews, the second level review must include the same items reviewed by first level and also the items identified on the draft 1196 letter.

    5. When your review of all case files is complete, prepare a typed write-up of any additional amendments, clarifications, and/or comments you feel are needed. Clearly explain each change request or comment and provide the appropriate authoritative citation. The second level comments should note which are required and those which are suggestions.

    6. Send the case files directly back to the first level reviewer with a Form 3210.

    7. Send an email to the clerk and the first level reviewer informing him/her of the mailing and include the plans’ names and the TRAC case number(s).

  2. The first level reviewer then completes his/her review of the case(s) as described in IRM 7.11.4.4.1, First Level Review Process paragraph 3 and returns them to the second level reviewer.

    1. When the first level reviewer returns the case files for a final second level review, the second level reviewer compares the final version of the plan with the 1196 and 1955 letters.

    2. If the second level reviewer determines that the plan requires additional amendments, he/she prepares a typed list of his/her comments and discusses with the first level reviewer. If the first and second level reviewers agree changes are still needed, generally the second level reviewer will secure the remaining changes.

  3. If the second level reviewer determines the plan is finished and ready for approval, he/she sends the case file to the coordinators with a Form 3210 stating the case file is ready for third level review (See IRM 7.11.4.6.4, Third Level Review) and sends an email to the clerk and the first level reviewer informing them of the movement.

7.11.4.5  (04-04-2012)
Administrative Procedures for Cadre Members

  1. Reviewers in the cadre should also be sure to follow these miscellaneous administrative procedures during the review process:

    1. Mailing Cases

    2. Use Pen

    3. Tracking Sheet

    4. Monthly Report

    5. Case File Assembly

7.11.4.5.1  (04-04-2012)
Mailing Cases

  1. All reviewers not housed in the Cincinnati Post of Duty (POD) receive cases via mail. The reviewer must notify the coordinators if there are special mailing procedures associated with his/her POD. Attach a completed Form 3210 (listing the name of the case and the TRAC case number) to the case.

7.11.4.5.2  (04-04-2012)
Use Pen

  1. All completed pre-approved plans are scanned into the computer. To avoid damaging equipment, reviewers must use a pen to prepare all forms, Alert Guidelines, other worksheets and any supporting notes or print from the computer.

7.11.4.5.3  (04-04-2012)
Tracking Sheet

  1. The tracking sheet is used to reflect the movement dates of the case between the first level reviewer and the second level reviewer as well as the time spent on the case by the applicable reviewer at each point in time. Once the record is created on TRAC, (See IRM 7.11.4.3.1, Establishing the M&P and VS Records) the screen is printed and the print out (Tracking Sheet) is attached to the front of the case file.

  2. When the case is ready to be sent to the coordinators for third level review, the second level reviewer should total the hours of the first level reviewer and the second level reviewer and list each total on the tracking sheet.

7.11.4.5.4  (04-04-2012)
Monthly Report

  1. At the end of each WebETS cycle, reviewers in the cadre email a case status report to the:

    1. Coordinators.

    2. Manager of the Pre-Approved Plans Program.

    3. Group manager.

  2. The monthly report should include the following:

    1. Case name

    2. TRAC case number

    3. Type of plan

    4. Whether the plan is a VS or M&P

    5. Whether the case is assigned as a first or second level review

    6. Date of assignment

    7. Comments on the status of the case

    8. Date of last contact with the M&P sponsor or VS practitioner

    9. Number of hours on the case to date

    10. Estimated date of completion (agreed upon between the first and second level reviewers)

    11. Name of other reviewer (first or second level) assigned to the case

7.11.4.5.5  (01-21-2015)
Case File Assembly

  1. When first and second level review is complete, assemble the case file in this order:

    Left Side (Top to Bottom) Right Side (Top to Bottom)
    VS and M&P Tracking Sheet with first and second level hours totaled at bottom Form 8717-A, User Fee for Employee Plan Opinion or Advisory Letter Request
    Form 5464-A, Case Chronology Record Form 2848, Power of Attorney and Declaration of Representation
    Certification Regarding Interim Good Faith Amendments Copy of last opinion or advisory letter
    All worksheets completed Copy of application (Form 4461 series, if applicable)
    Any TRAC Documentation Copies of all correspondence in chronological order
    Any copies of Form 3210 Final clean copy of Adoption Agreement (if applicable)
    Any Handwritten Notes in Pen Final clean copy of Plan Document
    **Place all purged material in a separate folder behind case file** Final clean copy of Trust Agreement; if more than one Trust Agreement, place all in a separate folder.

7.11.4.6  (01-21-2015)
Coordinators' Procedures

  1. There are two Pre-Approved Plans Coordinators, one for the M&P program and one for the VS program. When a reviewer has questions, the reviewer should contact the coordinators for the specific program.

  2. The coordinators' duties include:

    1. Developing and conducting training.

    2. Assigning cases to reviewers.

    3. Assisting with the technical aspects of a case.

    4. Conducting the third level review.

    5. Sending Preliminary Emails.

7.11.4.6.1  (01-21-2015)
Developing and Conducting Training

  1. The pre-approved plans submitted for each six-year cycle must satisfy the Cumulative List of Qualification Changes for that particular six-year cycle. New specialists are assigned to the cadre in each six-year cycle.

  2. To ensure a quality and consistent review, the cadre members receive training for each new six-year cycle. The training enables the cadre members to understand:

    1. What is expected of them.

    2. The statutory and regulatory changes the pre-approved plans must satisfy.

7.11.4.6.2  (01-21-2015)
Assigning Cases to Reviewers

  1. The coordinators are responsible for assigning cases to the first and second level reviewers. The reviewers email the program coordinators when they need work. The program coordinators select the cases from the unassigned inventory and send a list to the clerk who updates TRAC.

7.11.4.6.3  (01-21-2015)
Assisting with Technical Aspects of Case

  1. The coordinators provide technical guidance, conduct CENTRA sessions, and assist in resolving new and emerging issues.

7.11.4.6.4  (01-21-2015)
Third Level Review

  1. The coordinators (or one of their delegates) conduct a third level/final review of all pre-approved plan applications. The third level review is completed after the first and second level reviewers agree that an application has been perfected.

  2. The purpose of the third level review is to ensure certain key issues were addressed and consistently applied to all applications.

  3. Upon completion of third level review, the coordinators either:

    1. Issue a preliminary email. See IRM 7.11.4.6.5, Preliminary Emails.

    2. Send the case back to the first or second level reviewer for further development.

    3. Secure additional information/amendments from the practitioner or sponsor.

7.11.4.6.5  (01-21-2015)
Preliminary Emails

  1. A preliminary email is an email that the coordinators send to the M&P sponsor or VS practitioner notifying him/her that the IRS has reviewed their pre-approved plan.

  2. The preliminary email only assures the sponsor/practitioner that the coordinators believe the plan appears to meet the applicable Cumulative List qualification requirements used to review the plan as of the date of the email. It does not constitute an official opinion or advisory letter.

  3. The coordinators prepare and send the email to the M&P sponsor or VS practitioner and send a blind copy to the first and second level reviewers. At this time, the first and second level reviewers can close the case off of their WebETS timesheets and monthly reports.

7.11.4.7  (04-04-2012)
Manager, Pre-Approved Plans Program

  1. The Manager, Pre-Approved Plans Program runs the program and ensures that all issues are timely resolved. The coordinators may contact the Manager with any issues that prevent an application from being processed.

7.11.4.8  (01-21-2015)
Processing Plans Involving Special Circumstances

  1. Some situations may arise while processing pre-approved plan applications that require additional attention.

  2. Common situations involve:

    1. Withdrawal of a pre-approved plan application.

    2. Assumption of sponsorship.

    3. A grossly deficient plan or an innovative plan design.

  3. If a specialist has any additional questions or concerns, contact the coordinators for applicable procedures.

7.11.4.8.1  (04-04-2012)
Withdrawals of a Pre-approved Plan

  1. An M&P sponsor or VS practitioner may wish to withdraw his/her pre-approved plan application.

  2. The specialist takes the following steps when notified that the sponsor/practitioner wants to withdraw:

    1. Notify the Pre-Approved Plans Coordinators immediately.

    2. Inform the sponsor/practitioner that the IRS must receive an official letter of withdrawal.

    3. Inform the sponsor/practitioner that the user fee is non-refundable.

  3. Upon receipt of the official letter of withdrawal, the coordinators consider the case withdrawn and issue a letter to the sponsor/practitioner confirming the withdrawal.

7.11.4.8.2  (07-16-2013)
Assumption of Sponsorship

  1. In some instances, another entity may assume sponsorship of an existing M&P or VS plan.

  2. If requested, the IRS will reissue an opinion or advisory letter to the new entity if the following requirements are met:

    1. No additional amendments are made to the plan document.

    2. The assumption is evidenced by a change of EIN.

    3. The new sponsor pays the required fee. See Rev. Proc. 2014-8 (revised annually).

    4. The new entity submits any other documentation evidencing the assumption of sponsorship as the IRS requests.

7.11.4.8.3  (04-04-2012)
Grossly Deficient Plans and Innovative Plan Designs

  1. The IRS won't rule on grossly deficient plans and innovative plan designs.

  2. A grossly deficient pre-approved plan is a plan that is substantially out of compliance with the applicable Cumulative List and other qualification requirements. It also includes a plan which is so deficient that it can’t be reviewed in a reasonable amount of time. If you find a grossly deficient plan, discontinue review and forward it to the coordinators with an explanation.

    1. Explain why the plan is considered grossly deficient.

    2. Identify any qualification issues which were discovered.

  3. If the coordinators agree that the plan is grossly deficient, return the plan to the sponsor/practitioner giving him/her 30 days to resubmit a substantially compliant document. The coordinators will closely analyze any re-submission for compliance before assigning it for review.

  4. The Pre-Approved Plans Program is meant for traditional plan designs; thus innovative plan designs are not accepted in the program. If a specialist encounters something in a M&P or VS plan which they don't recognize or for which they can’t find clear supportive IRS guidance (excluding private letter rulings), they should discontinue review and contact the Pre-Approved Plans Coordinators immediately.

Exhibit 7.11.4-1 
Definitions

The following table lists several definitions used in this IRM:

Term Definition
Adoption Agreement The portion of the plan containing the options that may be selected by an adopting employer.
Advisory Letter A written statement issued by the IRS to a VS practitioner or VS mass submitter as to the acceptability of the form of a specimen plan and any related trust or custodial account under IRC 401(a) or IRC 403(a).
Basic Plan Document The portion of a plan containing all the non-elective provisions applicable to all adopting employers. No options may be provided in the basic plan document.
M&P Sponsor Any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) represents to the IRS that it has at least 30 employer-clients each of which is reasonably expected to timely adopt the sponsor’s basic plan document.
M&P Mass Submitter Any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) submits opinion letter applications on behalf of at least 30 unaffiliated sponsors each of which is sponsoring, on a word-for-word identical basis, the same basic plan document.
Master Plan A plan that a sponsor makes available for employers to adopt and for which a single funding medium is established, as part of the plan, for all adopting employers to use. A master plan consists of a basic plan document, an adoption agreement, and, unless included in the basic plan document, a trust or custodial account document.
Minor Modification A minor change to an otherwise word-for-word identical plan of the M&P mass submitter that does not require an in-depth technical review.
Opinion letter A written statement issued by the IRS to a sponsor or M&P mass submitter as to the acceptability of the form of an M&P plan under IRC 401(a) or IRC 403(a), and, in the case of a master plan, the acceptability of the master trust under IRC 501(a).
Prototype Plan A plan that a sponsor makes available for employers to adopt and under which a separate funding medium is established for each adopting employer. A prototype plan consists of a basic plan document, an adoption agreement, and, unless the basic plan document incorporates a trust or custodial account agreement the provisions of which are applicable to all adopting employers, a trust or custodial account document.
Remedial Amendment/Approval Cycle (RAC) Rev. Proc. 2005-66, which was later modified and superseded by Rev. Proc. 2007-44, established a system of cyclical remedial amendment periods under IRC 401(b). Under this system, individually designed plans have a five-year RAC and pre-approved plans have a six-year RAC. The cycles stagger the submission of determination letter applications so that different plans are submitted at different times.
Specimen Plan A sample plan of a VS practitioner (rather than the actual plan of an employer). A specimen plan may include an adoption agreement.
Trust or Custodial Account Document The portion of an M&P plan or Specimen Plan that contains the trust agreement or custodial account agreement and includes provisions covering matters such as the powers and duties of trustees, investment authority and the kinds of investments that the plan sponsor may make.
Volume Submitter Plan Refers to either a specimen plan of a VS practitioner or a plan of a client of the VS practitioner that is substantially similar to the VS practitioner’s approved specimen plan.
Volume Submitter Practitioner Any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) represents to the IRS that it has at least 30 employer-clients each of which is reasonably expected to timely adopt a plan that is substantially similar to the VS practitioner’s specimen plan.
VS Mass Submitter Any person that (1) has an established place of business in the United States where it is accessible during every business day and (2) 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.

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