2017 Pre-Approved Retirement Plan Opinion Letter Program

Revenue Procedure 2017-41 changes the IRS Pre-Approved Plan Program. These changes are effective for plans applying for opinion letters beginning with the third six-year remedial amendment cycle (10/02/2017 to 10/01/2018).

Highlights of changes

  • The Revenue Procedure combines the previous procedures for master and prototype (M&P) and volume submitter (VS) programs into a new Opinion Letter program.
  • There are two types of pre-approved plans - standardized and non-standardized. Standardized plans are essentially the same as they were under the predecessor M&P program; non-standardized plans adopt the flexibility of plans under the predecessor VS program.
  • Standardized or non-standardized plans may be designed as a basic plan document with an adoption agreement, or as a single plan document.
  • Adopting employers may make minor modifications to non-standardized plans but can’t modify standardized plans.
  • Money purchase, 401(k), and profit-sharing plans may now be combined into one adoption agreement with a basic plan document, or a single plan document.
  • Non-standardized employee stock ownership plans may include a 401(k) feature.
  • Non-standardized cash balance plans may use the actual return on plan assets as the interest crediting rate.
  • Non-electing church plans may now file for opinion letters.
  • Non-standardized plans may now use non-safe harbor standards for hardship distributions.
  • Trusts or custodial accounts can’t be submitted as part of the opinion letter application because the IRS will no longer rule on their exempt status.
  • The opinion letter application period for the third defined contribution plan six-year remedial amendment cycle is modified to begin October 2, 2017, and end on October 1, 2018.
  • The IRS also issued Notice 2017-37, the Cumulative List of Changes in Plan Qualification Requirements for Pre-Approved Defined Contribution Plans for 2017. Pre-approved plan providers should use this List to prepare plan documents before applying for an opinion letter. The Lists of Required Modifications (LRMs) have been updated for this remedial amendment cycle.

Additional Resources