IRS Modifies Procedures for Pre-Approved 403(b)s

The IRS has extended the deadline for applications for opinion and advisory letters regarding the acceptability under § 403(b) of the Internal Revenue Code of the form of prototype plans and volume submitter plans, respectively, through April 30, 2015. Revenue Procedure 2014-28 also makes certain modifications to the program established by Revenue Procedure 2013-22 (see “IRS Establishes Program for Pre-Approved 403(b) Plans”) that are intended to allow more plan sponsors and eligible employers to participate in the § 403(b) pre-approved plan program.

The agency explained that after evaluation and consideration of comments from pre-approved plan provider, it changed the previous requirement that, to qualify as a § 403(b) pre-approved plan provider, an entity or person must expect at least 30 eligible employers to adopt its § 403(b) prototype plan basic plan document(s) or § 403(b) volume submitter specimen plan(s). The required number of eligible employers is reduced to 15.

In addition, the IRS previously required that to qualify as a mass submitter, a person or entity must submit opinion or advisory letter applications on behalf of at least 30 prototype sponsors, or 30 volume submitters, respectively, each of which is sponsoring, on a word-for-word identical basis, the same basic plan document or specimen plan. This is modified to reduce the required number of prototype sponsors or volume submitters, as applicable, to 15.

Other requirements for volume submitter plans have been modified.

The text of Revenue Procedure 2014-28 is here.