7.11.4 IRC 401(a) and 403(b) Pre-Approved Plans Program

Manual Transmittal

October 19, 2021

Purpose

(1) This transmits revised IRM 7.11.4, Employee Plans Determination Letter Program, IRC 401(a) and 403(b) Pre-Approved Plans Program.

Material Changes

(1) Updated IRM 7.11.4.6 to add more detail regarding the duties of the Pre-Approved Plans Coordinators.

(2) Updated the IRM throughout to include the IRC 403(b) Pre-Approved Program. Changes include updating the name of the IRM and adding references to Rev. Proc. 2021-37 which sets forth the procedures for the issuance of IRC 403(b) plan Opinion Letters for the second remedial amendment cycle (RAC) and which provides rules for determining when remedial amendment periods expire for 403(b) pre-approved plans.

(3) Updated the IRM throughout for plain language and current revenue procedures.

Effect on Other Documents

This supersedes IRM 7.11.4, dated October 23, 2020.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(10-19-2021)


Eric D. Slack
Director, Employee Plans
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM provides procedures and guidance to employees who process and review Opinion Letter applications from Pre-Approved Plan Providers.

  2. Audience:

    1. Pre-Approved Plans Program clerk (clerk)

    2. First and Second-Level Reviewers who work Pre-Approved Plans

    3. Pre-Approved Plans Coordinators (coordinators)

    4. Manager, Pre-Approved Plans Program

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Program Goals: The goal of EP Determinations is to ensure that plans comply with the tax laws. We do this by reviewing applications for Determination and Opinion Letters and protecting the public interest by applying the tax law with integrity and fairness to all.

  6. The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3). For additional information about the Taxpayer Bill of Rights, see TBOR and IRM 1.2.1.2.36, Policy Statement 1-236.

Authority

  1. The IRC 401(a) Pre-Approved Plans Program is described in Rev. Proc. 2017-41

    1. Rev. Proc. 2017-41 modifies and supersedes Rev. Proc. 2015-36.

    2. Rev. Proc. 2015-36 modifies and supersedes Rev. Proc. 2011-49.

  2. Rev. Proc. 2016-37 which clarifies, modifies, and supersedes Rev. Proc. 2007-44, gives additional information on this program.

  3. The program’s scope has certain limitations as described in Rev. Proc. 2017-41, section 6.

  4. The IRC 403(b) Pre-Approved Plans Program is described in Rev. Proc. 2021-37.

    1. Rev. Proc. 2021-37 modifies and supersedes Rev. Proc. 2013-22 and modifies Rev. Proc. 2019-39.

  5. IRC 403(b) Program History: Under Rev. Proc. 2013-22 as modified by Rev. Proc. 2014-28, and Rev. Proc. 2015-22, and clarified by Rev. Proc. 2017-18, the IRS established a pre-approved plans program for IRC 403(b) plans and an initial remedial amendment period (RAP) for retroactive correction to January 1, 2010 of plan form defects. This was in response to the formal plan document requirement created by the 2007 final regulations under IRC 403(b). The majority of the opinion and advisory letters were issued on March 31, 2017 to the first cycle of prototype 403(b) plans and volume submitter 403(b) plans respectively. Rev. Proc. 2017-18, as modified by Notice 2020-35, gave employers until June 30, 2020, to adopt a prototype or volume submitter 403(b) plan or otherwise timely amend their plan and correct any form defects retroactive to January 1, 2010. Rev. Proc. 2019-39 establishes recurring RAP’s for correcting form defects after the expiration of the initial RAP.

  6. Rev. Proc. 2021-37 sets forth the procedures for the issuance of opinion letters to IRC 403(b) pre-approved plans for the second remedial amendment cycle (Cycle 2) and provides rules for determining when remedial amendment periods expire. It also modifies the procedures for the IRC 403(b) Pre-Approved Program to be more similar to the procedures applicable to the IRC 401(a) Pre-Approved Program. The submission period for the second pre-approved 403(b) plan cycle begins on May 2, 2022 and ends on May 1, 2023.

Acronyms

  1. Acronyms used in this IRM:

    Acronym Term
    DB Defined Benefit
    DC Defined Contribution
    EIN Employer Identification Number
    EP Employee Plans
    LRM Listing of Required Modifications
    POA Power of Attorney
    POD Post of Duty
    RAC Remedial Amendment/Approval Cycle
    TRAC TE/GE Rulings and Agreements Control System
    WebETS Web-Based Employee Technical Time System

Submitting a Pre-Approved Plan

  1. Pre-Approved Plan Providers submit Opinion Letter requests on:

    1. Form 4461, Application for Approval of Standardized or Nonstandardized Pre-Approved Defined Contribution Plans.

    2. Form 4461-A, Application for Approval of Standardized or Nonstandardized Pre-Approved Defined Benefit Plan.

    3. Form 4461-B, Application for Approval of Standardized or Nonstandardized Pre-Approved Plans (Mass Submitter Adopting Provider).

    4. Appendix A of Rev. Proc. 2021-37, Application for Approval of Code Section 403(b) Pre-Approved Plan.

  2. Pre-Approved Plan providers 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 6-403, Group 7521
    Internal Revenue Service
    550 Main Street
    Cincinnati, OH 45202
    Attn: Pre-Approved Plans Coordinator
    Room 6-403, Group 7521

  3. Pre-Approved Plans generally have a six-year remedial amendment/approval cycle (RAC) as explained in Rev. Proc. 2016-37, Section 14 and Rev. Proc. 2019-19 Section 5. The IRS generally uses the second and third years of the six-year cycle to review the plans for their compliance with IRC 401(a) or 403(b). The period given to Providers to submit Pre-Approved Plans for a particular RAC will be announced by the Service and will normally be a one-year period. The IRS may, when necessary, announce appropriate adjustments to the start and/or end dates to a cycle, as well as any relevant time frames occurring with that cycle.

  4. Pre-Approved Plan Opinion Letter applications must include:

    1. Applicable user fee per Rev. Proc. 2021-4, Appendix A, as adjusted annually

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

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

    4. Form 4461 series or application form from the Appendix A to Rev. Proc. 2021-37 for 403(b) plans

    5. Attachment I (DC) or Attachment I-A (DB) or any attachment required for 403(b) plans

    6. Cover letter

    7. Plan document

    8. Adoption Agreement, if applicable

    9. Certification Regarding Interim Amendments

      Note:

      The Pre-Approved Plan Provider or Mass Submitter are strongly encouraged to submit items “c” through “i” on a thumb or flash drive in lieu of paper documents. The thumb or flash drive provided by the taxpayer shall be handled with the minimum security controls set out in IRM 10.8.1.4.10.6(4).

Late Submissions

  1. Pre-Approved Providers or Mass Submitters with valid opinion/advisory letters from the immediately preceding cycle are expected to submit applications for each particular RAC on time. The same holds true for a new Provider or Mass Submitter unless that Provider or Mass Submitter didn’t exist during the particular general deadline to file.

  2. If Providers or Mass Submitters don't submit by the scheduled due date, it could result in a 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. 2017-41, Section 11, and Rev. Proc. 2016-37, Section 21, for more details on IRC 401(a) off-cycle submissions. Rev. Proc. 2021-37, Section 12 for IRC 403(b) off-cycle submissions.

  4. Once the two-year period starts for employers to adopt and possibly submit determination letter applications for a particular RAC, the Pre-Approved Plans Program doesn’t accept late submissions except for word-for-word Identical Adopter plan applications described in Rev. Proc. 2017-41, Section 11 and Rev. Proc. 2021-37, Section 12.

Impermissible Plan Types

  1. There are certain situations for which the IRS won’t issue Opinion Letters. For IRC 401(a) plans, see Rev. Proc. 2017-41, Section 6.03. For IRC 403(b) plans, see Rev. Proc. 2021-37, Section 6.03.

Issuance of Opinion Letters

  1. The IRS:

    1. Issues virtually all Opinion Letters at the same time for Pre-Approved Providers and Mass Submitters who file their plans timely.

    2. Publishes a uniform 2-year timeframe in an announcement during which adopting employers must adopt the newly approved plans.

Expediting the Issuance of Opinion Letters in Certain Instances

  1. If a Provider or Mass Submitter wishes to expedite the issuance of an Opinion 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 Modification

  1. A minor-modifier is a plan that only has minor changes to an otherwise identical word-for-word Mass Submitter’s Pre-Approved Plan. These plans don't require an in-depth technical review.

  2. For minor-modifier plans: The Mass Submitter submits the Form 4461-B for DC and DB plans and the application form from the Appendix A of Rev. Proc. 2021-37 for 403(b) plans. When the Mass Submitter plan receives its preliminary notification (See IRM 7.11.4.6.7, Preliminary Notifications), they prepare a plan document for each minor-modifier application and submit them to the IRS. For IRC 401(a) plans, the Mass Submitter follows the directions in Rev. Proc. 2017-41, Section 10.03(2). For IRC 403(b) plans, the Mass Submitter follows the directions in Rev. Proc. 2021-37, Section 11.03(2).

  3. Minor-modifier applications are generally assigned to the first-level reviewer, who reviewed the Mass Submitter lead plan.

  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 Provider (i.e., non-mass submitter).

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

Duties of the Pre-Approved Plans Clerk (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. Creating an electronic case file.

    4. Updating case status.

Establishing the Record on TRAC (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. Provider or Mass Submitter 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, plan type, mass submitter status, and filing status.

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

    9. Control date

Transmitting User Fee to Florence (Clerk)

  1. After inputting the information, print the TRAC user fee 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 Florence to process and deposit the checks:

    Internal Revenue Service
    7940 Kentucky Drive
    Attn: TEGE Campus Support Stop 31A
    Team Number AW 105
    Florence, KY 41042

  6. When Florence 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 copies of the check and the TRAC user fee screen in the applicable Pre-Approved Plan paper case file with the banking information sanitized.

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

Creating an Electronic Case File (Clerk)

  1. Once the TRAC record and case number are created and the user fee is transmitted, the Clerk creates an electronic case file by scanning the paper Opinion Letter submission and adding the resulting PDF in the shared folder designated for storage of all the electronic case files. If the Pre-Approved Plan Provider or Mass Submitter used a flash or thumb drive for the submission, simply transfer or copy the documents to the shared folder. Generate an electronic tracking sheet (See IRM 7.11.4.5.2, Tracking Sheet) and include with each electronic case file.

    Reminder:

    The thumb or flash drive provided by the taxpayer shall be handled with the minimum security controls set out in IRM 10.8.1.4.10.6(4).

  2. The case is now ready for assignment to a first-level reviewer.

  3. Place each paper Opinion Letter submission in its own folder and keep in the Pre-Approved Plans Program storage room until determined to be purgeable. If a flash or thumb drive was used, keep it in the folder with the paper documents.

Creating Acknowledgement Letters (Clerk)

  1. After cases are added to TRAC, print and mail acknowledgement letters to the Providers to notify them that we received their initial submission. The acknowledgment letters may be printed either on a singular basis or in a bulk run based on the input date in the TRAC system.

Case Status Updates (Clerk)

  1. Update the status code of the TRAC record for the assignment/transfer of Pre-Approved Plan cases to reviewers and/or coordinators when necessary.

First-Level Case Assignment (Clerk)
  1. When the coordinators notify you by email that a case is being assigned to a first-level reviewer and that the reviewer should access the assigned electronic case file in the designated shared folder, update the case record in TRAC indicating the first-level reviewer’s TRAC I.D. number and the “first-level review” status code. Then, email the coordinators and the first-level reviewer letting them know you updated TRAC.

Second-Level Case Assignment (Clerk)
  1. When a first-level reviewer emails you that a case is ready for second-level assignment, update the case record in TRAC to the "awaiting assignment for second-level review" status code.

  2. When the coordinators notify you by email that a case is being assigned to a second-level reviewer and that the reviewer should access the assigned electronic case file in the designated shared folder, update the case record in TRAC indicating the second-level reviewer’s TRAC I.D. number and the "assigned to second-level reviewer" status code. Then, email the coordinators and the second-level reviewer letting them know you updated TRAC.

Case Assigned Both First and Second-Level (Clerk)
  1. Once an electronic case file is assigned to both a first-level reviewer and a second-level reviewer, it’s not returned to the coordinators until it’s complete. Whenever the two reviewers need to exchange the electronic case during their review, 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 TRAC I.D. number and indicate first or second-level review status.

Review and Issuance of the Opinion Letter (Clerk)
  1. After both reviewers complete their reviews, the second-level reviewer emails the clerk indicating the case is ready for discretionary final review and eventual issuance of the Opinion Letter.

  2. Once the coordinators receive each reviewer’s final case chronology record (CCR) electronically, one of the coordinators emails the clerk the total case hours (first and second-level reviewer) to input into TRAC. Update the case on TRAC to show the case is in discretionary final review status and put it in the coordinator’s TRAC I.D. number.

Case Closing (Clerk)
  1. After the coordinators do a discretionary final review and send a notification giving preliminary approval (See IRM 7.11.4.6.7, Preliminary Notifications), update the case in TRAC:

    1. Change the status code to show that the discretionary final review has been completed.

    2. Enter the preliminary notification date.

Case Processing Procedures

  1. Management-selected Determinations specialists work Applications for Pre-Approved Plans.

    1. Generally, only grade 12 and 13 EP specialists from EP Determinations are selected.

    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 a Provider’s or Mass Submitter’s lead plans are assigned to one reviewer.

  3. The first and second-level reviewers email the coordinators and their group manager when they need work. The coordinators assign all work electronically.

First-Level Review Process

  1. First-Level Reviewer: When the coordinators notify you of a case assignment, access the electronic case file in the designated shared folder. Complete the following as part of your initial review:

    1. Update the time sheet (WebETS) and the Pre-Approved Plans monthly report. (See IRM 7.11.4.5.3, Monthly Report.)

    2. Prepare an electronic case assignment letter (see the Pre-Approved folder on the shared server for a template) and mail it to the Provider or Mass Submitter. Include your name and contact information on the letter.

    3. Complete an electronic Form 5464, Case Chronology Record (CCR). You can complete one Form 5464 for each case file or one master Form 5464 for the entire Provider’s or Mass Submitter’s case files. Include your name on the form and enter "assigned for the first-level review" as the first entry under the section "Topics Discussed, Information Requested or Other Action Taken" . If more than one page, number each page accordingly, or include the year in the first date entry of each page. Don’t upload the CCR to the electronic case file stored in the designated shared folder.

    4. Complete your review using the applicable Cumulative List and Listing of Required Modifications (LRMs), which are distributed during training. Your review must include: Form 4461 series application or application form contained in the Appendix A to Rev. Proc. 2021-37 for 403(b) plans, the cover letter, any plan documents, and adoption agreements. Electronically complete the applicable Alert Guidelines Worksheets when the plan doesn’t follow the LRM.

    5. When you complete all case files for a Provider or Mass Submitter, prepare an electronic draft Letter 1196 to request any additional information. Clearly explain each change request or comment and cite the appropriate legal authority.

    6. Upload the draft Letter 1196, the case assignment letter and your completed worksheets to the electronic case file on the designated shared folder. Email the clerk and coordinators to let them know the case is ready for second-level assignment.

  2. Clerk: Update the case record in TRAC for the proper status code.

  3. Second-level reviewer: Begin your review of the case(s) per IRM 7.11.4.4.2, Second-Level Review Process. When you’re done, upload your comments to the electronic case file stored on the designated shared folder and email the clerk and first-level reviewer that you’ve completed your review. The TRAC case number(s) should be included in the email.

  4. First-level reviewer: When the second-level reviewer notifies you of their completed review:

    1. Review their comments in the electronic case file and incorporate them into the draft 1196 letter as appropriate.

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

    3. Once you resolve all questions and/or comments, finalize the 1196 letter and mail it to the Mass Submitter/Provider with a 30-day response time. You may, at your discretion, grant an extension of the response time, but typically not more than an additional 24 days.

    4. Continue to work the case until the plan is perfected (ready to close, in your opinion). If necessary, follow-up with a 1955 letter to request additional items after the initial request. Limit the response date in the 1955 letter to 14 days or less as good judgement dictates. You can use EEFAX to send the 1955 letter.

    5. Contact the coordinators if no response is received or if you receive a mostly incomplete response after you send a 1196 or 1955 letter. The Coordinators may decide that an 1197 letter should be sent (certified mail) with a response due date of 10 days. If there is still not a sufficient response, return the case to the Coordinators who will close the application as incomplete.

    6. When the plan is perfected, secure a final clean copy of the plan document and adoption agreement (if applicable). Mark as "FINAL" with the date received (e.g. FINAL BPD xx-xx-xxxx).

    7. Upload the final clean copy of the plan, all 1196/1955/1197 letters, all Provider response letters, and, if applicable, an explanation why you did not secure certain amendments, to the electronic case file stored on the designated shared folder.

    8. Update the electronic tracking sheet to show you’re sending the case(s) 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) to notify them of case movement.

Second-Level Review Process

  1. When the coordinators notify you of a case assignment, access the electronic case file in the designated shared folder, and complete the following as part of your initial review:

    1. Update the time sheet (WebETS) and the Pre-Approved Plans monthly report. (See IRM 7.11.4.5.3, Monthly Report.)

    2. Prepare an electronic case assignment letter (see the Pre-Approved folder on the shared server for a template) and mail it to the Provider or Mass Submitter. Include your name and contact information on the letter.

    3. Complete an electronic Form 5464, Case Chronology Record. You can complete one Form 5464 for each case file or one master Form 5464 for the entire Provider’s or Mass Submitter’s case files. Your Form 5464 should be separate from the first-level reviewer’s Form 5464. Include your name on the form and 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 page accordingly, or include the year in the first date entry of each page. Don’t upload the CCR to the case file stored in the designated shared folder.

    4. Include in your review the same items reviewed at the first-level and the items listed on the draft 1196 letter.

    5. When you complete your review, prepare a typed summary of any additional amendments needed, clarifications, and/or comments. Clearly explain each change request or comment and cite the appropriate authority. In your comments, distinguish between items that are required and items that are suggestions.

    6. Upload your second-level review comments and the case assignment letter to the electronic case file in the designated shared folder.

    7. Email the clerk and the first-level reviewer informing them you’re returning the case to first-level reviewer 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: When you receive the case file from the first-level reviewer for a final second-level review:

    1. Compare the final version of the plan with the 1196, 1955 and/or 1197 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:

    1. Upload any final changes and associated material secured to the electronic case file in the designated shared folder.

    2. Email the clerk, first-level reviewer, and coordinators stating the case file is ready for a discretionary final review (See IRM 7.11.4.6.4, Discretionary Coordinator Review).

    3. Notify the Provider by letter that the case has moved to discretionary final review.

    4. A copy of this letter should be uploaded to the electronic case file in the designated shared folder.

    5. At this point, the first and second-level reviewers must email their completed CCRs to their group manager, the manager of the pre-approved plans program, and the coordinators.

Administrative Procedures

  1. Pre-Approved Plans reviewers: also follow these miscellaneous administrative procedures:

    1. All documents must be prepared electronically.

    2. Tracking Sheet

    3. Monthly Report

    4. Case File Assembly

Prepare all Documents Electronically

  1. All Pre-Approved Plan case files are scanned into the computer system and worked electronically. Prepare all forms, Alert Guidelines, other worksheets and any supporting notes electronically and upload them into the case file in the designated shared folder.

Tracking Sheet

  1. The electronic tracking sheet is used to show the movement dates of the case between the first and second-level reviewers.

Monthly Report

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

    1. Coordinators

    2. Manager of the Pre-Approved Plans Program

    3. Group manager of the reviewer

  2. Include on the monthly report:

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

    2. Case name

    3. Form of plan (for example, AA (adoption agreement) or SD (single document))

    4. Date of assignment

    5. Comments on the status of the case

    6. Date of last contact with the Provider or Mass Submitter

    7. Number of hours on the case to date

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

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

Information Necessary in Electronic Case File

  1. When first and second-level review is complete, assemble the case file with these required elements, not necessarily in this order:

    1. Pre-Approved Plan Tracking Sheet

    2. Certification Regarding Interim Good Faith Amendments

    3. All worksheets completed

    4. Form 8717-A, User Fee for Employer Plan Opinion Letter Request (if applicable)

    5. Form 2848, Power of Attorney and Declaration of Representation (if applicable)

    6. Copy of last opinion or advisory letter (if applicable)

    7. Copy of application (form 4461 series, if applicable)

    8. Copies of all correspondence labelled with the date that they were sent/received

    9. Final clean copy of Adoption Agreement (if applicable)

    10. Final clean copy of Plan Document

    Note:

    Name each file according to its contents, for example, Final Plan Document, and date received (XYZ LAW FIRM FINAL PLAN DOCUMENT 10/09/2019).

Coordinators' Duties

  1. Reviewers may contact the Pre-Approved Plans Coordinators with questions.

  2. The coordinators' duties include:

    1. Assist with Guidance, Forms, LRMs, etc.

    2. Developing and conducting training.

    3. Developing and Updating Desk Guide Procedures and Worksheets.

    4. Assigning cases to reviewers.

    5. Helping with the technical aspects of a case.

    6. Conducting the discretionary final review.

    7. Sending Preliminary Notifications.

    8. Helping management and Compliance, Planning, & Classification as needed.

    9. Providing technical assistance to Counsel as needed.

    10. Issuing Opinion Letters.

    11. Verifying User Fees Deposited Appropriately.

    12. Determining Grossly Deficient Plans and Innovative Plan Designs.

    13. Oversee Pre-approved Plans Correspondence.

Assist with Guidance, Forms, LRMs, etc.

  1. The coordinators provide aid to multiple business units to help publish and update guidance, forms, etc. for each pre-approved RAC. Some of the assistance that they provide include helping:

    1. The technical advisor and Counsel to publish the Cumulative List and other guidance relating to the opening and closing of each RAC.

    2. To update the Form 4461 series by using the Publishing Services Request application.

    3. Technical Office update the applicable LRM.

    4. The Office of Taxpayer Correspondence and Counsel approve the content of the Opinion Letter.

    5. IT Programmers to ensure that TRAC is updated for each RAC.

    6. Write newsletters and update the IRM and IRS.gov site to keep public informed of changes to the program.

Developing and Conducting Training

  1. The Pre-Approved Plans submitted for each cycle must satisfy the Cumulative List of Qualification Changes for that particular cycle.

  2. To ensure a quality and consistent review, the reviewers receive training for each new cycle. The training enables the reviewers to understand:

    1. What is expected of them.

    2. The statutory and regulatory changes the Pre-Approved Plans must satisfy.

  3. During training, reviewers also receive plan document review tools the coordinators developed.

Developing and Updating Desk Guide Procedures and Worksheets

  1. The coordinators develop and update the procedures and worksheets that the specialists use to review plan documents.

  2. Worksheets should begin being prepared 9 months before the review period for a cycle.

Assigning Cases to Reviewers

  1. Reviewers email the program coordinators and their group manager when they need work. The coordinators assign cases to the first and second-level reviewers. The program coordinators select the cases from the unassigned inventory and send a list to the reviewer, and clerk, who updates TRAC.

Assisting with Technical Aspects of Case

  1. The coordinators give technical guidance, present in SABA sessions, and help to resolve new and emerging issues.

Discretionary Coordinator Review

  1. The coordinators (or one of their delegates) at their discretion do a final review of Pre-Approved Plan applications 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 7.11.4.6.7, Preliminary Notifications.

    2. Return the case electronically to the first or second-level reviewer for further development.

    3. Secure additional information/amendments from the Provider or Mass Submitter.

  4. If the coordinator secures additional changes they upload the changes to the electronic case file in the designated shared folder.

Preliminary Notifications

  1. A preliminary notification is a notice that the coordinators send to the Provider or Mass Submitter to inform them that the IRS has completed its review of their Pre-Approved Plan.

  2. The preliminary notification only assures the Provider/Mass Submitter 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’s not an official Opinion Letter.

  3. The coordinators prepare and send the notification to the Provider or Mass Submitter and inform the first and second-level reviewers it has been sent. At this time, the first and second-level reviewers can close the case off of their WebETS time sheets and monthly reports.

  4. Coordinators upload preliminary notifications to the electronic case file in the designated shared folder.

Assisting Management & Compliance Planning & Classification

  1. The coordinators prepare monthly and interim reports detailing the progress of the pre-approved inventory.

Providing Technical Assistance to Counsel

  1. Counsel consults the coordinators for input on various forms of guidance related to the EP Determinations function of EP Rulings and Agreements.

Issuing Opinion Letters

  1. The coordinators generate, print, and mail the opinion letters for all completed applications on a designated day at the end of each review period. Virtually all Opinion Letters are printed and mailed on the same day for Providers and Mass Submitters who file their plans timely.

  2. For late submissions, as described in IRM 7.11.4.2.1, the clerk is responsible for generating, printing, and mailing the opinion letters but the coordinators provide assistance, as appropriate.

Verify User Fee Deposited Appropriately

  1. Ensure that Campus personnel deposit the user fees in a reasonable time after they are mailed and that Beckley Finance receives timely deposit reports within the first 3 business days of the month following the month in which the report is being run.

Oversee Pre-Approved Plans Correspondence

  1. Log incoming Pre-Approved Plan correspondence onto the log sheet.

  2. Ensure correspondence is being completed by the clerk on a timely basis.

Manager, Pre-Approved Plans Program

  1. The Manager, Pre-Approved Plans Program, administers 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 Pre-Approved Plan applications may have situations that require additional attention:

    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.

  2. If a specialist has any additional questions or concerns, he/she should contact the coordinators for applicable procedures.

Withdrawing a Pre-Approved Plan

  1. A Provider or Mass Submitter may wish to withdraw his/her Pre-Approved Plan application. When they notify you that they want to withdraw, specialists should:

    1. Notify the Pre-Approved Plans Coordinators immediately.

    2. Inform the Provider/Mass Submitter that the IRS must receive an official letter of withdrawal.

    3. Inform the Provider/Mass Submitter that the user fee is non-refundable.

  2. Upon receipt of the official letter of withdrawal, the coordinators consider the case withdrawn and issue a letter to the Provider/Mass Submitter confirming the withdrawal.

  3. If the withdrawal is of a submission of a/an:

    1. Identical Adopter of a Mass Submitter plan, the IRS refunds the user fee if the request is made before IRS issues the Opinion Letter.

    2. Minor Modification of a Mass Submitter plan, the IRS refunds the user fee unless we’ve started our review.

  4. If an Identical Adopter of a 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 Letter.

  5. The clerk updates the TRAC status code to show that the case was withdrawn and completes the explanation field on the plan screen to indicate whether a refund was set up on a particular date or that no refund applies.

Assumption of Sponsorship

  1. In some instances, another entity may assume sponsorship of an existing Pre-Approved Plan. If requested, the IRS reissues an Opinion Letter to the new entity if the following requirements are met:

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

    2. The assumption of sponsorship is documented by a change of EIN.

    3. The new sponsor pays the required fee. See Rev. Proc. 2021-4 (revised annually).

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

  2. The reissued Opinion Letter is dated based on either:

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

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

  3. The clerk updates TRAC accordingly and issues the new Opinion Letter with the new sponsor’s information.

Name and/or Address Changes

  1. If a Provider or Mass Submitter requests an updated Opinion Letter for:

    1. Only an address change, they must include a cover letter indicating the change. No user fee is required.

    2. A name change, they must include a cover letter and an updated application. No user fee is required.

  2. The clerk updates TRAC accordingly and issues a new Opinion Letter with the updated information.

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 the IRS can’t review it in a reasonable amount of time.

  3. If you find a grossly deficient plan, stop reviewing it and explain in an email to the coordinators:

    1. Why the plan is considered grossly deficient.

    2. Any qualification issues you discovered.

  4. 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 Pre-Approved 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.

  5. When a specialist informs the Pre-Approved Coordinators that they have a grossly deficient or innovative plan design, the Coordinators:

    1. Reviews the document

    2. If the Coordinators agrees with the specialist, they return the plan to the Provider and give them 30 days to resubmit a substantially compliant document. The coordinators closely analyze any resubmission for compliance before reassigning it for review.

    3. If the Coordinators do not agree that the plan is grossly deficient or that it contains an innovative plan design, they return the case to the specialist to continue their review.

Definitions

The following table lists several definitions used in this IRM:

Term Definition
Adoption Agreement The part of the plan that lists the options an adopting employer may select.
Basic Plan Document The part of a plan containing all the non-elective provisions applicable to all adopting employers. The basic plan document may not have any options.
Eligible Employer An employer described in IRC 403(b)(1)1(A).
Identical Adopter Any person with an established place of business in the U.S. that is accessible during every business day who sponsors a plan as a word-for-word identical adopter of a Mass Submitter, regardless of the number of employers expected to adopt the plan.
Investment Arrangements A funding arrangement under an IRC 403(b) plan. It may be an annuity contract under Treas. Regs. 1.403(b)-2(b)(2), a custodial account under IRC 403(b)(7), or a Retirement Income Account under IRC 403(b)(9).

Note:

The Investment Arrangement must be in a document separate from the rest of the plan and must not be submitted. The IRS will not review for, and the Opinion Letter will not cover any provisions included in Investment Arrangements.

Mass Submitter For a DC or DB plan, 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 Providers, each of which is offering, on a word-for-word identical basis, the same plan document. The mass submitter may also be treated as an unaffiliated Provider as well as any Providers offering a Flexible Plan. See Rev. Proc. 2017-41, section 4.04.

Note:

For a 403(b) plan, the unaffiliated Provider requirement is 15. See Rev. Proc. 2021-37 section 4.14.

Minor-Modifier A minor-modifier is a plan that only has minor changes to an otherwise identical word-for-word of the Mass Submitter’s Pre-Approved Plan. These plans don’t require an in-depth technical review.
Opinion Letter For a DC or DB plan, a written statement issued by the IRS to a Provider or Mass Submitter as to the qualification in form of a plan under IRC 401, IRC 403(a), or both IRC 401 and IRC 4975(e)(7).
For a 403(b) plan, a written statement issued by the IRS to a Provider or Mass Submitter that the form of a 403(b) Pre-approved Plan satisfies the 403(b) Requirements.
Pre-Approved Plan May be an Adoption Agreement Plan or a Single Plan Document.
An Adoption Agreement Plan consists of a Basic Plan Document and an Adoption Agreement.
The Single Plan Document consists of a single plan document offered by a Provider without an adoption agreement.
Provider For IRC 401(a) plans, any person (including, if applicable, a Mass Submitter) 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 in its application for an Opinion Letter that it has at least 15 employer-clients, each of which is reasonably expected to adopt the same Pre-Approved Plan of the Provider. A Provider may request an Opinion Letter for more than one plan provided it represents to the IRS that it has at least 30 employer-clients in the aggregate, each of which is reasonably expected to adopt at least one of the Provider’s plans.
For IRC 403(b) plans, any person (including, if applicable, a Mass Submitter) 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 in its application for an Opinion Letter that it has at least 15 Eligible Employers, each of which is reasonably expected to adopt one of the Pre-Approved Plans of the Provider. Not withstanding the preceding sentence, a person that is otherwise eligible to be a Provider generally may apply for an Opinion Letter for a plan that is intended to be a Retirement Income Account without satisfying the 15-Eligible Employer requirement with respect to that plan. However, if that person also applies for an Opinion Letter with respect to a IRC 403(b) Pre-approved Plan that is not a Retirement Income Account, the person would need to meet the 15-Eligible-Employer requirement for the plan that is not a Retirement Income Account.
Remedial Amendment/Approval Cycle (RAC) Rev. Proc. 2005-66, 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) for DB and DC plans.
Rev. Proc. 2013-22 as modified by Rev. Proc. 2014-28, and Rev. Proc. 2015-22, and clarified by Rev. Proc. 2017-18, and further modified by Rev. Proc. 2019-39 and Rev. Proc. 2021-37. established a system of cyclical remedial amendment periods for 403(b) plans.
Under this system, Pre-Approved Plans have a RAC. The cycles stagger the submission of Opinion Letter applications so that defined benefit, defined contribution, and IRC 403(b) plans are submitted at different times.
Trust or Custodial Account Document The separate portion of a 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.

Note:

The trust agreement or custodial account agreement must be in a document separate from the rest of the plan. Copies of trusts or other funding mediums must not be submitted. The IRS will not review for, and the Opinion Letter will not cover, any provisions included in trust documents.