Pre-Approved Plan Program Expanded to Include Cash Balance Plans and ESOPs


Revenue Procedure 2015-36 updates existing guidance on master & prototype and volume submitter plan applications for opinion and advisory letters. Important changes in the new revenue procedure include:

  • Extending the application deadline for pre-approved defined benefit plans from June 30 to October 30, 2015,
  • Opening the pre-approved plan program to cash balance plans for submission by October 30, 2015, and
  • Expanding the pre-approved plan program to employee stock ownership plans (ESOPs) during the defined contribution application period beginning February 1, 2017.

Concurrent with the new revenue procedure, the IRS has also released sample language - Listings of Required Modifications (LRMs) - for pre-approved cash balance plans and ESOPs.

Expanding the pre-approved plan program to cash balance plans and ESOPs promotes the IRS’s ongoing objective of increasing the availability of pre-approved plans to small and mid-size employers.

Converting individually designed plans into pre-approved plans

Employers currently maintaining individually designed plans that intend to adopt pre-approved cash balance plans or ESOPs (when available) should complete Form 8905, Certification of Intent To Adopt a Pre-approved Plan, before the end of their plan’s current 5-year remedial amendment cycle. This form serves as a record of the employer’s intention to transition from an individually designed plan to a pre-approved plan. See the FAQs on Form 8905 and Revenue Procedure 2007-44, Part IV for further information.

If an employer doesn’t know which particular pre-approved plan it will ultimately adopt the employer does not need to complete Part II or the information in Part III, line 4, of Form 8905 (requiring identifying information on the pre-approved plan and certification by the M&P sponsor or VS practitioner). Instead, attach a statement indicating that the employer intends to adopt a pre-approved cash balance plan or ESOP when the plan has received an opinion/advisory letter. The employer should keep a copy of the form and statement and attach them to any determination letter application (Form 5300, 5307 or 5310) they file.

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