Can a 457(b) Plan Document Get IRS Approval?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

Q: I noticed that our 403(b) plan uses a preapproved document with an IRS opinion letter, but our 457(b) plan does not. Is there a preapproval process for 457(b) plans?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

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A: Not only is there not a preapproved document program for 457(b) programs, but there is also no determination letter program whereby you can submit your 457(b) plan for IRS approval after the document is drafted. The only method via which you can obtain IRS approval for your 457(b) plan document is to request what is called a private letter ruling from the IRS, a cumbersome task.

Given the lack of practical IRS approval programs, it would be prudent for plan sponsors to work with attorneys well-versed in 457(b) plans when drafting 457(b) plan documents.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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