7.11.4 IRC 401(a) Pre-Approved Plans Program

Manual Transmittal

May 31, 2017

Purpose

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

Material Changes

(1) Updated various sections for grammatical rules in the IRS Style Guide.

(2) Changed all references in IRM from Rev. Proc. 2016-8 to Rev. Proc. 2017-4.

(3) Updated these IRM sections to show that Rev. Proc. 2007-44 was clarified, modified, and superseded by Rev. Proc. 2016-37

  • IRM 7.11.4.1, Overview of the Pre-Approved Plans Program.

  • IRM 7.11.4.2, Submitting a Pre-Approved Plan.

  • The definition of Remedial Amendment/Approval Cycle (RAC) in Exhibit 7.11.4-1, Definitions.

Effect on Other Documents

This supersedes IRM 7.11.4, dated March 23, 2016.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(05-31-2017)

Lisa Beard-Niemann
Acting Director, Employee Plans
Tax Exempt and Government Entities

Overview of the Pre-Approved Plans Program

  1. The Pre-Approved Plans Program administers and processes 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. The M&P and VS programs, collectively referred to as the Pre-Approved Plans Program, is described in Rev. Proc. 2015-36, which modifies and supersedes Rev. Proc. 2011-49. Rev. Proc. 2007-44, which was clarified, modified, and superseded by Rev. Proc. 2016-37, gives additional information on this program.

Submitting a Pre-Approved Plan

  1. Pre-Approved plan sponsors file advisory or opinion letter requests 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. Pre-Approved plan sponsors mail applications 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. 2016-37, section 14. 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 them.

    Type of Application: General Deadline to File:
    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 January 31 of the calendar year in which the particular DC or DB six-year RAC opens

    Note:

    See Exhibit 7.11.4-1, Definitions, and Rev. Proc. 2015-36 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 per Rev. Proc. 2017-4 (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

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 IRS delay in processing the application and issuing a favorable letter.

  3. An employer adopting a late submitted pre-approved plan could have less than the normal two year adoption period. See Rev. Proc. 2015-36, section 21.03, Rev. Proc. 2007-49 and Rev. Proc. 2008-56 for more details on off-cycle submissions.

  4. Once the two-year period starts for employers to adopt and possibly submit determination letter applications for a particular (DC or DB) six-year RAC, the Pre-Approved Plans Program doesn’t 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. 2015-36, section 21.03.

Impermissible Plan Types

  1. The Pre-Approved Plans Program is not open for all types of plans.

    1. Rev. Proc. 2015-36, sections 6.02 and 6.03 discuss situations for which the IRS won’t issue opinion letters.

    2. Rev. Proc. 2015-36, sections 16.02 and 16.03 discuss situations for which the IRS won’t issue advisory letters.

Issuance of Opinion and Advisory Letters

  1. For those M&P sponsors and VS practitioners who filed their plans timely, the IRS issues virtually all of their Opinion Letters and Advisory Letters at the same time.

  2. The IRS publishes an announcement giving the date that adopting employers must adopt the newly approved plans.

  3. The date is a uniform date that applies to all adopting employers.

Expediting the Issuance of Opinion and Advisory Letters in Certain Instances

  1. If a sponsor or practitioner wishes to expedite the issuance of 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 (4), Late Submissions, 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.

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’s pre-approved plan. These plans don't require an in-depth technical review.

  2. For minor modifier plans: The mass submitter sponsor submits the Form 4461-B page 1 as a placeholder. When the mass submitter plan receives its preliminary notification (See IRM 7.11.4.6.5, Preliminary Notifications), they prepare a plan document for each minor modifier application and submit them to the IRS according to Rev. Proc. 2015-36, section 12.03 paragraph two.

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

  4. The first level reviewer only reviews the changes that differ from the lead plan. If the reviewer determines the changes are not minor, he/she stops reviewing and offers the applicant the opportunity to file as a non-mass submitter lead plan.

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

Duties of the Pre-Approved Plans Clerical Staff (Clerk)

  1. The Pre-Approved Plans Program clerk helps manage 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.

Establishing the M&P and VS Records (Clerk)

  1. As soon as you receive the application, create a record of it on the TE/GE Rulings and Agreements Control System (TRAC). 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

Transmitting User Fee to Covington (Clerk)

  1. After inputting the information, print the TRAC screen and make one copy of each check.

  2. Prepare a Form 3210, Document Transmittal listing:

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

    2. Each check number and corresponding EIN.

  3. Create four copies of each Form 3210.

  4. Attach the actual checks and copies of the TRAC user fee screens to copies one and three of the Form 3210 and put this package into an envelope and seal it.

  5. Put the sealed envelope into an interdepartmental folder and mail it to Covington where the checks are processed and deposited:

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

  6. When Covington returns the Forms 3210, put them in the user fee master file binder.

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

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

  9. Don’t hold checks unprocessed for more than three days.

Preparing Tracking Sheet (Clerk)

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

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

Case Transfers/Assigning Cases (Clerk)

  1. Assign/transfer pre-approved plan cases to reviewers and/or coordinators when necessary.

First Level Case Assignment (Clerk)
  1. When the coordinators are ready to assign the case to a first level reviewer, update the case record in TRAC indicating the first level reviewer's number and the "first level review" status code.

  2. Print the TRAC screen and place it in the case file. Mail (if reviewer’s Post of Duty (POD) isn’t Cincinnati) the case to the first level reviewer and email him/her of the case assignment.

Second Level Case Assignment (Clerk)
  1. When you receive a case file from a first level reviewer, acknowledge receipt by annotating the Form 3210 with the receipt date and initials. Return the original to the first level reviewer and update the TRAC record to the "awaiting assignment for second level review" status code. Print the TRAC screen and put the printout in the case file.

  2. File the case.

  3. When the coordinators are ready to assign the case to a second level reviewer, update the case record in TRAC indicating the second level reviewer's number and the "assigned to second level reviewer" status code. Print the TRAC screen and put it in the case file.

  4. Mail the case to the second level reviewer (if the reviewer’s POD isn’t Cincinnati) and email him/her of the case assignment.

Case Assigned Both First and Second Level (Clerk)
  1. Once a case file is assigned to both a first level reviewer and a second level reviewer, it’s not returned to the coordinators until it is complete. The first and second level reviewers send the case back and forth to 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.

  2. Update the case record on TRAC to reflect the change in the current reviewer's number and indicate first or second level review status.

Review and Issuance of the Opinion/Advisory Letter (Clerk)
  1. After review is complete, the second level reviewer returns the case to the coordinators for discretionary final review and eventual issuance of the opinion or advisory letter.

  2. Update the case on TRAC to reflect the case is in discretionary final review and put it in the coordinator’s TRAC number. Print the TRAC screen and insert it into the case file.

Case Closing (Clerk)
  1. After the coordinators review the case file and send a notification giving preliminary approval (See IRM 7.11.4.6.5, Preliminary Notifications), update the case in TRAC:

    1. Change the status code.

    2. Enter the preliminary notification date.

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

  2. Print the TRAC screen and put it in the case file. Hold the case and wait for the opinion or advisory letter to be issued.

Case Processing Procedures for Cadre Members

  1. Applications for pre-approved plans are only worked by specialists in the Pre-Approved Plans Cadre.

    1. The cadre is made up of designated grade 12 and 13 EP specialists from various EP Determination groups.

    2. All lead plans go through a first level of review with a specialist and then a second level of review with another specialist.

    3. All grade 12 specialists work as first level reviewers and all grade 13 specialists perform first or second level 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 have both VS and M&P plans.

    1. For this situation, two reviewers are paired to review all of the organization’s lead plans.

    2. One reviewer is assigned as the first level reviewer for the VS plans and the second level reviewer for the M&P plans.

    3. 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.

First Level Review Process

  1. First Level Reviewer: When you physically receive the case(s) from the clerk, complete the following as part of your 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. If 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 when 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. Clerk: Upon receipt of the case files, acknowledge receipt by annotating the Form 3210 with the receipt date and initials. Return the original to the first level reviewer and forward the cases to the second level reviewer.

  3. Second level reviewer: Begin your review of the case(s) as described in IRM 7.11.4.4.2, Second Level Review Process. When you are done, return the case(s) to the first level reviewer for additional review.

  4. First level reviewer:

    1. When you receive the case(s) back from the second level reviewer, review the second level comments and appropriately incorporate them into the draft 1196 letter.

    2. Discuss any disagreements or questions about 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. You may, at your discretion, grant an extension of the response time.

    4. Keep the case files until the plan is perfected (ready to be closed in your opinion). Secure a final clean copy of the plan upon finalization of all amendments.

    5. When the plan is perfected, send the case(s) back to the second level reviewer with a Form 3210.

    6. Update the tracking sheet to reflect that the case(s) are being sent for final second level review and email the clerk and the second level reviewer with the case name(s) and the TRAC case number(s) informing them of movement.

Second Level Review Process

  1. Second level reviewer: You receive your case(s) from the clerk after the first level reviewer completes his/her initial review. When you physically receive the case(s), complete the following as part of your 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. If more than one page, number each accordingly.

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

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

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

    7. Email 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. First level reviewer: Complete your review of the case(s) per IRM 7.11.4.4.1 (4) and return the case(s) to the second level reviewer.

  3. Second level reviewer:

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

    2. If you determine that the plan needs additional amendments, prepare a typed list of comments and discuss with the first level reviewer. If you both agree changes are still needed, generally the second level reviewer secures the remaining changes.

    3. If you determine the plan is finished and ready for approval, send the case file to the coordinators with a Form 3210 stating the case file is ready for a discretionary final review (See IRM 7.11.4.6.4, Discretionary Coordinator Review) and email the clerk and the first level reviewer informing them of the movement.

Administrative Procedures for Cadre Members

  1. Cadre reviewers should also follow these miscellaneous administrative procedures during their review:

    1. Mailing Cases

    2. Use Pen

    3. Tracking Sheet

    4. Monthly Report

    5. Case File Assembly

Mailing Cases

  1. Reviewers not located in the Cincinnati POD receive cases via mail. Reviewers must notify the coordinators if their POD has special mailing procedures. Attach a completed Form 3210 (listing the name of the case and the TRAC case number) to the case.

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.

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 and their case time 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 clerk prints the screen (Tracking Sheet) and attaches it to the front of the case file.

  2. When the case is ready to be sent to the coordinators for discretionary final review, the second level reviewer totals the first level reviewer’s and the second level reviewer’s hours and lists each total on the tracking sheet.

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. Include on the monthly report:

    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

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.

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, he/she should contact the coordinator 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 discretionary final review.

    5. Sending Preliminary Notifications.

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. The cadre rotates specialists 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.

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.

Assisting with Technical Aspects of Case

  1. The coordinators provide technical guidance, conduct SABA sessions, and help to resolve new and emerging issues.

Discretionary Coordinator Review

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

  2. The purpose of the final review is to ensure certain key issues were addressed and consistently applied.

  3. After they complete the final review, the coordinators either:

    1. Issue a preliminary notification. See IRM 7.11.4.6.5, Preliminary Notifications.

    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.

Preliminary Notifications

  1. A preliminary notification is a notification 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 notification 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 notification. It doesn’t constitute an official opinion or advisory letter.

  3. The coordinators prepare and send the notification to the M&P sponsor or VS practitioner and send a 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 time sheets and monthly reports.

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.

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. Name and/or address changes.

    4. 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.

Withdrawing a Pre-approved Plan

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

  2. Specialists take the following steps when a sponsor/practitioner notifies them that they want 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.

  4. If the withdrawal is of a submission of an Identical Adopter of a M&P Mass Submitter or VS Mass Submitter plan, the IRS refunds the user fee if the request is made before IRS issues the Opinion/Advisory letter.

  5. If the withdrawal is of a submission of a Minor Modification of a M&P Mass Submitter plan, the IRS refunds the user fee unless we’ve started our review.

  6. If an Identical Adopter of a M&P Mass Submitter or VS Mass Submitter requests a switch of its submission to another mass submitter, no additional user fee is due if the request is made before IRS issues the Opinion/Advisory letter.

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 reissues 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. 2017-4 (revised annually).

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

  3. The reissued opinion or advisory letter is dated based on either:

    • The postmark date when the new sponsor pays with a certified or cashier’s check.

    • A later date, after the check clears, when the new sponsor pays with a regular check.

Name and/or Address Changes

  1. A request for an updated Opinion or Advisory letter for only an address change must include a cover letter indicating the change. No user fee is required.

  2. A request for an updated Opinion or Advisory letter for a name change must include a cover letter and an updated application. No user fee is required.

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 either:

    1. Substantially out of compliance with the applicable Cumulative List and other qualification requirements.

    2. So deficient that it can’t be reviewed in a reasonable amount of time.

  3. 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 you discovered.

  4. 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 closely analyze any re-submission for compliance before assigning it for review.

  5. The Pre-Approved Plans Program is meant for traditional plan designs; therefore innovative plan designs aren’t accepted in the program. If you encounter something in a M&P or VS plan that you don't recognize or for which you can’t find clear supportive IRS guidance (excluding private letter rulings), stop your review and contact the Pre-Approved Plans Coordinators immediately.

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.
Identical Adopter Any person that has an established place of business in the U.S. where it is accessible during every business day who sponsors a plan as a word for word identical adopter of a M&P or VS Mass Submitter, regardless of the number of employers that are expected to adopt the plan.
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 15 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 and later clarified, modified, and superseded by Rev. Proc. 2016-37, established a system of cyclical remedial amendment periods under IRC 401(b). Under this system, pre-approved plans have a six-year RAC. The cycles stagger the submission of opinion and advisory letter applications so that defined benefit and defined contribution 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 15 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.