For more information on determination letters and adopting a pre-approved retirement plan, see:
I have an individually designed plan and would like to adopt a pre-approved plan. How do I make the switch?
First, find a pre-approved plan and contact the provider. An employer may adopt a pre-approved plan at any time during the applicable (defined contribution (DC) or defined benefit (DB)) six-year remedial amendment cycle (Revenue Procedure 2016-37, Section 19).
What is the deadline for an employer to adopt a newly approved version of a pre-approved plan?
April 30, 2020, is the deadline to adopt a pre-approved defined benefit plan restated for items on the 2012 Cumulative List. (Announcement 2018-05)
April 30, 2017, was the extended deadline to adopt a pre-approved defined contribution plan restated for items on the 2010 Cumulative List (sometimes called a “PPA” plan because the plan reflects the Pension Protection Act of 2006) (Notice 2016-3). This extended deadline applied to individually designed plan sponsors switching to a pre-approved plan on or after January 1, 2016, and allows them to apply for a determination letter by that date if otherwise permissible.
April 30, 2016, was the date by which an employer who maintained a pre-approved defined contribution plan prior to January 1, 2016, was required to adopt a new version of the plan (restated to reflect items on the 2010 Cumulative List) (Announcement 2014-16).
Can an adopting employer rely on a pre-approved plan’s opinion or advisory letter, or must the employer request its own letter?
Generally, an adopting employer that doesn’t make any changes or only specified minor changes to the plan document can rely on the opinion or advisory letter for the pre-approved plan. Examples of minor changes include: changing the effective date of a provision, adopting IRS model or sample amendments, or the adoption of required amendments (Revenue Procedure 2015-36, Section 19 and Revenue Procedure 2016-37, Section 20.03), and Revenue Procedure 2017-41, Section 7).
Can an adopting employer request a separate determination letter on Form 5307?
Form 5307 is accepted only from adopters of Volume Submitter (VS) specimen plans that modify the terms of the pre-approved VS specimen plan (and only if the modifications are not so extensive as to cause the plan to be treated as an individually designed plan for application filing purposes. The application must be filed within the announced adoption period (Revenue Procedure 2016-37, Section 14.03).
VS adopting employers that have not made any changes to the terms of the pre-approved VS specimen plan (except to select among options under the plan) and M&P adopting employers are not eligible to submit Form 5307.
These employers may rely on the advisory or opinion letter issued for the VS or M&P plan.
Note: There is one very limited exception for an adopting employer of a M&P plan to use the Form 5307. This is where the employer has added language to the M&P plan to satisfy the requirements of Sections 415 and 416 because of the required aggregation of plans and desires reliance for such issue not normally given by the opinion letter (Revenue Procedure 2018-4, Section 12.01(5)(a)). An employer in this situation should identify the reason for filing the Form 5307 in its cover letter to the submission and/or by a notation across the top of the Form 5307.
Can an adopting employer request a determination letter on Form 5300?
In certain circumstances, an employer that adopts a pre-approved M&P or VS plan may file its own application for a determination letter on Form 5300 during the 2-year window. This is appropriate if:
- the plan is a VS multiple employer plan and the employer has made limited modifications to it; or
- the plan is a pension plan with a normal retirement age earlier than age 62.
An application on Form 5300 for one of the reasons listed above will be reviewed on the basis of the Cumulative List that was considered in issuing the opinion or advisory letter for the pre-approved plan (the document provider’s letter). The employer must indicate the reason for using Form 5300 in its cover letter and must include a copy of the opinion or advisory letter issued with respect to the M&P or VS plan (the document provider’s letter).
What if a Master & Prototype plan adopting employer makes significant changes to the pre-approved basic plan document or adoption agreement?
An employer that makes changes to the underlying plan document will be considered to have adopted an individually designed plan (Revenue Procedure 2016-37, Section 24.03). If allowed under Revenue Procedure 2016-37, Form 5300 would be required for determination letter requests. See New Determination Program Rev. Proc. 2016-37.
Since the plan is treated as an individually designed plan, it must be updated for the applicable Cumulative Lists and/or Required Amendments Lists and based on the date of submission for a determination letter. The employer submitting Form 5300 must submit the approved adoption agreement along with the amendments made for the applicable Cumulative Lists and Required Amendments List. The M&P sponsor will lose its ability to adopt amendments on behalf of the adopting employer as of the date the IRS exercises its authority under section 24.03 of Revenue Procedure 2015-36.
I am an adopter of a volume submitter plan who made changes to my pre-approved document. How do I let the IRS know what changes were made?
The application must include a list describing the changes to the VS document. Regardless of whether the application is filed on Form 5307 (PDF) or is required to be filed on Form 5300 (PDF) (because, for example, the changes are very extensive), the changes to the pre-approved volume submitter plan may be either incorporated into the pre-approved document or made as separate “tack-on” amendments to the plan. See Section 13 of Revenue Procedure 2020-4 (annually updated).
I have adopted discretionary plan amendments since my last determination letter. Should I include copies of these amendments when I apply for a new determination letter on my volume submitter plan?
Yes. You should include copies of discretionary amendments you adopted, in addition to the restated plan or completed adoption agreement and basic plan document. See Section 10 of Revenue Procedure 2020-4 (annually updated).
If I file a determination letter application for my pre-approved plan by the end of the two-year adoption period, and the IRS determines that additional amendments are needed, will I have time to adopt the amendments?
Yes. The remedial amendment period will not end before the expiration of 91 days following issuance of the determination letter.
I am filing Form 5310 (PDF) to terminate my Master & Prototype or Volume Submitter plan. Must I include copies of interim amendments with my application?
Yes. The application must include copies of all interim amendments adopted since the plan’s last determination letter, including interim amendments required to bring the plan into compliance with changes in the qualification requirements that are effective as of the proposed date of termination. See Terminating a Retirement Plan.
If I apply for a determination letter on my pre-approved plan, what happens if I have not timely adopted interim amendments?
M&P document providers are required to adopt interim amendments on behalf of employers that adopt their plans. VS document providers may adopt interim amendments on behalf of adopting employers, but some do not. If you adopt a VS plan where the document provider does not make plan amendments on behalf of adopting employers, then you are required to timely adopt interim amendments (amendments to reflect law changes that take effect in the time between plan restatements). If you fail to timely adopt interim amendments for law changes, this may jeopardize your plan’s qualified status beginning with the earliest effective date of those changes, which may be before the date of your document provider’s favorable letter. See Correcting Plan Errors for information on bringing your plan back into compliance.