7.11.4 IRC 401(a) Pre-Approved Plans Program

Manual Transmittal

November 06, 2019

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 IRM 7.11.4.3.2 (5) for new address to send user fees.

(2) Updated IRM 7.11.4.3.3 to detail the steps to follow when creating an electronic case file.

(3) Updated IRM 7.11.4.3.4.1 to detail the procedures to be followed when notified by the coordinator that a case is being assigned to a first-level reviewer.

(4) Updated IRM 7.11.4.3.4.2 to detail the procedures to be followed when notified by the first-level reviewer that a case is assigned to a second-level reviewer.

(5) Updated IRM 7.11.1.1.1 to detail the first-level review process.

(6) Updated IRM 7.11.4.4.2 to detail the second-level review process.

(7) Updated IRM 7.11.4.5.4 to show the order documents in the case file are to be assembled.

(8) Updated the IRM throughout for current Revenue Procedures.

Effect on Other Documents

This supersedes IRM 7.11.4, dated September 26, 2018.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(11-06-2019)

Catherine L. Jones
Acting 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.

Authority

  1. The Pre-Approved Plans Program, is described in Rev. Proc. 2017-41

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

    • 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.

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 file Opinion Letter requests on:

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

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

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

  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 have a six-year remedial amendment/approval cycle (RAC) as explained in Rev. Proc. 2016-37, section 14. 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). The general deadline to submit Pre-Approved Plans is January 31st of the calendar year after the particular defined contribution (DC) or defined benefit (DB) six-year RAC opens. 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.

    Example:

    The on-cycle submission period for the third six-year remedial amendment cycle for DC plans was delayed to begin on October 2, 2017 per Rev. Proc. 2017-41, section 9.02 and end on December 31, 2018 per Rev. Proc. 2018-42.

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

    1. Applicable user fee per Rev. Proc. 2019-4, 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

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

    6. Cover letter

    7. Plan document

    8. Adoption Agreement, if applicable

    9. Certification Regarding Interim Amendments

Late Submissions

  1. Pre-Approved Providers or Mass Submitters 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 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 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 word-for-word Identical Adopter plan applications (i.e., Forms 4461-B) described in Rev. Proc. 2017-41, section 11.

Impermissible Plan Types

  1. Rev. Proc. 2017-41, section 6.03, discusses situations for which the IRS won’t issue Opinion Letters.

Issuance of Opinion Letters

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

  2. The IRS publishes an announcement with 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 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 a minor change 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 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. 2017-41, section 10.03(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, an electronic case file should be created 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. An electronic tracking sheet (See IRM 7.11.4.5.2, Tracking Sheet) should also be generated and included with each electronic case file.

  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 retain in the Pre-Approved Plans Program storage room until such time as it is determined to be purgeable.

Case Status Updates (Clerk)

  1. Updates 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 notified by email from the coordinators 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 send an email to the coordinators and the first-level reviewer indicating that TRAC has been updated.

Second-Level Case Assignment (Clerk)
  1. When you receive an email from a first-level reviewer 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 notified by email from the coordinators 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. An email should then be sent to the coordinators and the second-level reviewer that TRAC has been updated.

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 it is necessary for the electronic case file to change hands between the two reviewers during the review process, 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 review is complete by both reviewers, the second-level reviewer sends an email to the clerk indicating the case is ready for discretionary final review and eventual issuance of the Opinion Letter.

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

Case Closing (Clerk)
  1. After the coordinators perform any necessary discretionary final review of 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.

Case Processing Procedures

  1. Applications for Pre-Approved Plans are worked by specialists selected by management.

    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 the same 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 you are notified by the coordinators that they have assigned a case to you, you will access the electronic case file in the designated shared folder. You will 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 and mail a paper copy to the Provider or Mass Submitter. 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 an electronic Form 5464-A, Case Chronology Record (CCR). You can complete one Form 5464-A for each case file or one master Form 5464-A for the entire Provider’s or Mass Submitter’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, or include the year in the first date entry of each page. Do not upload the CCR to the electronic case file stored in the designated shared folder.

    4. Complete your review using the applicable Cumulative List and the applicable Listing of Required Modifications (LRMs), which are distributed during training. Your review must include: Form 4461 series application, the cover letter, any plan documents, and adoption agreements. Complete the applicable Alert Guidelines Worksheets when the plan doesn’t follow the LRM. All worksheets are prepared electronically.

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

    6. After you complete the draft Letter 1196, it, as well as the case assignment letter and all worksheets completed should be uploaded to the electronic case file on the designated shared folder. An email should be sent to the clerk as well as coordinators informing them the case is ready for second-level assignment.

  2. Clerk: The clerk will update the case record in TRAC to reflect the proper status code.

  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, upload your comments to the electronic case file stored on the designated shared folder and notify the clerk and the first-level reviewer by email that you have completed your review.

  4. first-level reviewer:

    1. When you are notified by the second-level reviewer that he/she has completed his/her review, review the second-level comments that have been uploaded to 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 period. You may, at your discretion, grant an extension of the response time, but typically not more than an additional 24 days.

    4. The first-level reviewer will 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. The response period here should be limited to 14 days or less as good judgement dictates. You can use EFAX to send the 1955 letter.

    5. Secure a final clean copy of the plan upon finalization of all amendments. The final copy should be marked “FINAL VERSION” as well as with the date submitted.

    6. When the plan is perfected, the final clean copy of the plan, all 1196/1955 letters, all Provider response letters, and, if applicable, an explanation why you did not secure certain amendments, should be uploaded to the electronic case file stored on the designated shared folder.

    7. Update the electronic 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) to notify them of case movement.

Second-Level Review Process

  1. When you are notified by the coordinators that they have assigned a case to you, access the electronic case file in the designated shared folder. Once accessed, 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 and mail a paper copy to the Provider or Mass Submitter. 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 an electronic 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 Provider’s or Mass Submitter’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 page accordingly, or include the year in the first date entry of each page. Do not upload the CCR to the case file stored in the designated shared folder.

    4. For your review, include 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 provide the appropriate authoritative citation. Your comments should distinguish between items that are required and items that are suggestions.

    6. Upload your second-level 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 him/her of the return to first-level 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, upload any final changes and associated material secured to the electronic case file in the designated shared folder and 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). The Provider is then notified by letter that the case has moved to discretionary final review. A copy of this letter should be uploaded to the electronic case file in the designated shared folder. At this point the first and second-level reviewers must e-mail their completed CCRs to their group manager, manager pre-approved plans program, and the coordinators.

Administrative Procedures

  1. Pre-Approved Plans reviewers should also follow these miscellaneous administrative procedures during their review:

    1. Use Pen Where Needed

    2. Tracking Sheet

    3. Monthly Report

    4. Case File Assembly

Use Pen Where Needed

  1. All Pre-Approved Plan case files are scanned into the computer and worked electronically. Prepare all forms, Alert Guidelines, other worksheets and any supporting notes on the computer. Prepare any handwritten notes in pen and scan into your computer. Then upload them into the electronic 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. The following are the required elements of a case file which do not necessarily need to be in this order:

    • Pre-Approved Plan Tracking Sheet

    • Certification Regarding Interim Good Faith Amendments

    • All worksheets completed

    • Any handwritten notes in pen

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

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

    • Copy of last opinion or advisory letter (if applicable)

    • Copy of application (form 4461 series, if applicable)

    • Copies of all correspondence in chronological order

    • Final clean copy of Adoption Agreement (if applicable)

    • Final clean copy of Plan Document

    Note:

    The name assigned to each file must clearly reflect its contents, e.g., Final Plan Document, indicating the date received (XYZ LAW FIRM FINAL PLAN DOCUMENT 10/09/2019)

Coordinators' Duties

  1. There are two Pre-Approved Plans Coordinators. Reviewers may contact either coordinator with questions.

  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.

    6. Assisting management and Compliance, Planning, & Classification as needed.

    7. Providing technical assistance to Counsel as needed.

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.

  2. To ensure a quality and consistent review, the reviewers receive training for each new six-year 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.

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 and their group manager when they need work. 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 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. 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 he/she uploads 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 him/her that the IRS has reviewed 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 is not an official Opinion Letter.

  3. The coordinators prepare and send the notification to the Provider or Mass Submitter and send a copy to the first and second-level reviewers. At this time, the first and second-level reviewers can now 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 status of the pre-approved inventory at various stages.

Providing Technical Assistance to Counsel

  1. Counsel consults the coordinators for input on various forms of guidance related to the EP determination function.

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 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, 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.

  2. Specialists take the following steps when a Provider/Mass Submitter notifies them that they want to withdraw:

    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.

  3. 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.

  4. If the withdrawal is of a submission of an Identical Adopter of a Mass Submitter plan, the IRS refunds the user fee if the request is made before IRS issues the Opinion Letter.

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

  6. 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.

Assumption of Sponsorship

  1. In some instances, another entity may assume sponsorship of an existing Pre-Approved Plan.

  2. 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. 2019-4 (revised annually).

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

  3. The reissued Opinion 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 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 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 the IRS can’t review it in a reasonable amount of time.

  3. If you find a grossly deficient plan, discontinue review and notify the coordinators by email with an explanation that:

    1. Explains why the plan is considered grossly deficient.

    2. Identifies any qualification issues you discovered.

  4. If the coordinators agree that the plan is grossly deficient, the plan will be returned to the Provider/Mass Submitter 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 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.

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.
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.
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 Providers, each of which is offering, on a word-for-word identical basis, the same plan document.
Minor-Modification A minor change to an otherwise word-for-word identical Pre-Approved Plan of the Mass Submitter that the IRS determines does not require an in-depth technical review.
Opinion Letter 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).
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 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.
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). Under this system, Pre-Approved Plans have a six-year RAC. The cycles stagger the submission of Opinion Letter applications so that defined benefit and defined contribution 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 should not be submitted. The IRS will not review for, and the Opinion Letter will not cover, any provisions included in trust documents.