5306-A Application for Approval of Prototype Simplified Employe

OK to print as is
OK to print as corrected X (see red rectangles.)
Form

5306-A

(Rev. August 2010)
Department of the Treasury
Internal Revenue Service

Cumulative Changes

Version A, Cycle 2

Application for Approval of Prototype Simplified Employee
Pension (SEP) or Savings Incentive Match Plan for
Employees of Small Employers (SIMPLE IRA Plan)
Deleted "S"

OMB No. 1545-0199

(Under section 408(k) or (p) of the Internal Revenue Code)

For IRS Use Only

1

Part
2
a

b
c

3
4a

Enter amount of user fee submitted (see Specific Instructions) ▶ $
I Identifying Information (see instructions before completing this part)
File folder number
Approval requested for:
Type of plan—
(1)
Prototype simplified employee pension (SEP) under section 408(k)
Prototype savings incentive match plan for employees of small employers (SIMPLE IRA plan) under section 408(p)
(2)
Initial application
Amendment—Enter ▶
(1) Latest letter serial number
(2) Date letter issued
(3) File folder number

If the SEP contains elective deferral provisions, check this box
Name of applicant

.

.

.

.

.

.

.

.

.

. ▶

4b Applicant’s employer identification number

Number, street, and room or suite no. (If a P.O. box, see instructions on page 3.)
City or town, state, and ZIP code
5a

Name of person to be contacted

5c

Email address

5b Telephone number

DRAFT AS OF
July 29, 2010

5d If a power of attorney is attached, check box
. . ▶
6
Type of submission (check one box): a
Not a mass submitter
b
Mass submitter
Identical adoption of a mass submitter
d
Minor modification of a mass submitter
c
7a If 6c or 6d is checked, enter the mass submitter’s name
b File folder number of the mass submitter’s SEP or SIMPLE IRA plan on which this submission is based:
8
Type of sponsoring organization:
a
Insurance company
e
Regulated investment company
b
f
Trade or professional organization
Federally insured credit union
g
Approved non-bank trustee (attach copy of approval
Savings and loan association that qualifies as a bank
c
letter)
d
Bank

Part II

SEP Information

Attach a copy of the SEP documents and indicate the article or section and the page number where
the following provisions appear. If any item does not apply, write “N/A.” Sample language, or a listing
of required modifications (LRMs), is available on the IRS website at www.irs.gov. Type “LRM” in the
search box. Sponsors are encouraged to use LRM language.
IRS.gov.

9a

Plan Article or
Section
Reference

Does the SEP cover all employees who have attained age 21, performed service
for the employer in 3 of the immediately preceding 5 years, and received at least
$550* in compensation from the employer for the year, other than employees who
may be excluded under section 410(b)(3)(A) or (C)? . . . . . . . . . .

1
2

b Does the SEP provide that all eligible employees will share in an allocation? . .
c Does the SEP contain a definite allocation formula that does not discriminate in
favor of highly compensated employees? . . . . . . . . . . . . .

3
5

d Does the SEP require that it be used only with pre-approved traditional IRAs? .
e Does the SEP prohibit restrictions on withdrawals (other than restrictions
permitted under section 408(d)(7)(A) in the case of a salary reduction SEP)? . .
f

Plan
For
Page
IRS Use
Number
Only

6

Does the SEP define “compensation” in a manner that satisfies one of the safe
harbor definitions under section 414(s) and limit compensation under section
408(k)(3)(C)? . . . . . . . . . . . . . . . . . . . . . . .

7

* This is the amount for 2010. The amount may be increased in future years for cost-of-living adjustments.
Under penalties of perjury, I declare that I have examined this application, including accompanying statements, and to the best of my knowledge and belief, it
is true, correct, and complete.

Signature of officer

Date

For Paperwork Reduction Act Notice, see the instructions.
Cat. No. 32621R
Deleted "in" and "under "Search IRS Site for, "then click on "Listing of Required Modifications (LRMs).

▲

▲

Please
Sign
Here

Title
Form 5306-A (Rev. 8-2010)

Version A, Cycle 2

Deleted "in" and "under "Search IRS Site for, "then click on "Listing of Required Modifications (LRMs).
Form 5306-A (Rev. 8-2010)

Part III

Page

2

SIMPLE IRA Plan Information

Attach a copy of the SIMPLE IRA plan documents and indicate the article or section and the page
number where the following provisions appear. If an item does not apply, enter “N/A.” Sample
language, or a listing of required modifications (LRMs), is available on the IRS website at
www.irs.gov. Type “LRM” in the search box. Sponsors are encouraged to use LRM language.

Plan Article or
Section
Reference

10a Does the plan define the term “employer” to include all members of such groups
or entities required to be aggregated with the employer? . . . . . . . .
IRS.gov.
b Does the plan limit adoption to employers that have 100 or less employees who
earned $5,000 or more in compensation from the employer during the preceding
calendar year? . . . . . . . . . . . . . . . . . . . . . .
c Does the plan limit adoption to employers that do not maintain another qualified
plan to which contributions are made or benefits accrued? . . . . . . .
d Does the plan define the term “employee” to include leased employees and
employees described in section 401(c)(1)? . . . . . . . . . . . . .
e Does the plan cover all employees except those that may be excluded under
section 408(p)(4)? . . . . . . . . . . . . . . . . . . . . .

Plan
For
Page
IRS Use
Number
Only
1

2
3
4
5

f

Does the plan provide that each eligible employee may make or modify a salary
reduction agreement during the 60-day period immediately preceding the
calendar year after receiving proper notice? . . . . . . . . . . . .
g Does the plan provide that salary reduction contributions may not exceed the
statutory limits? . . . . . . . . . . . . . . . . . . . . . .
h Under the plan, is an eligible employee permitted to terminate a salary reduction
election at any time? . . . . . . . . . . . . . . . . . . . .
i
j

k
l

Is the interest of an eligible employee in the plan nonforfeitable at all times? . .
Does the plan provide that the employer will make matching contributions to each
eligible employee’s SIMPLE IRA equal to the employee’s salary reduction
contribution, up to a limit of 3% of the employee’s compensation for the calendar
year? . . . . . . . . . . . . . . . . . . . . . . . . .
Does the plan provide that the employer will make a 2% nonelective contribution
to each eligible employee’s SIMPLE IRA in lieu of matching contributions? . .

DRAFT AS OF
July 29, 2010

Does the plan require that the employer will make salary reduction contributions
to eligible employees’ SIMPLE IRAs no later than 30 days after the month in which
the amounts would otherwise have been payable to the employee in cash?
m Unless the employer has chosen, does the plan allow each eligible employee to
select the financial institution for their SIMPLE IRA? . . . . . . . . . .
n If the employer has selected the financial institution, does the plan require the
financial institution to meet the notification requirements of section 408(p)(7) and
limited in accordance with section 408(p)(2)(B)? . . . . . . . . . . .
o
p
q
r

Does the plan define “compensation” as described in section 408(p)(6)(A)? . .
Does the plan require that it be used only with pre-approved SIMPLE IRAs? . .
Does the plan prohibit restrictions on withdrawals? . . . . . . . . . .
Does the plan provide that amendments will become effective only at the
beginning of a calendar year and will conform to the content of the plan notice for
the calendar year? . . . . . . . . . . . . . . . . . . . . .

6
7
8
9

10
11

12
13

14
15
16
17

18

Deleted "Does the SEP define "compensation" in a manner
that satisfies one of the safe harbor definitions under section
414(s) and limit compensation under section 408(k)(3)(C)?

Deleted "as of the earliest date on which
these contributions can reasonably be
segregated from the employer's general
assets?

Form 5306-A (Rev. 8-2010)

Deleted "program"

Version A, Cycle 2

Deleted last sentence of
previous 2nd para.

Form 5306-A (Rev. 8-2010)

Page

General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.
Purpose of form. Form 5306-A is used
by sponsors who want to get IRS
approval of their prototype simplified
employee pension (SEP) agreements or
savings incentive match plans for
employees of small employers (SIMPLE
IRA plan).
Who may file. Use Form 5306-A to
request a favorable opinion letter if:
• You are a bank, federally insured credit

union, savings and loan association that
qualifies as a bank, insurance company,
regulated investment company, or trade
or professional society or association
(other than an employee association);
and
• You want to get a favorable opinion
letter that a SEP agreement or SIMPLE
IRA plan to be used by more than one
employer is acceptable in form.

Who does not need to file. Instead of
designing their own SEP or SIMPLE IRA
plan, sponsors may use one of the Form
5304 or 5305 series of model forms to
establish a SEP or a SIMPLE IRA plan.
Sponsors who use one of these forms
with individual retirement accounts or
annuities for which the IRS has issued a
favorable opinion or ruling letter, or with
model individual retirement accounts
issued by the IRS, are considered to
have established a SEP or SIMPLE IRA
plan that meets the requirements of
section 408(k) or 408(p). Do not file
Form 5306-A if you use a model form.

Signature. An officer who is authorized
to sign or another person authorized
under a power of attorney must sign this
application. (Send the power of attorney
with this application when you file it.)

Specific Instructions
User fee. All applications must be
accompanied by the appropriate user
fee. Applications submitted without the
proper user fee will not be processed
and will be returned to the applicant.
To determine the proper user fee, see
Rev. Proc. 2010-8, 2010-1 I.R.B. 234
available at www.irs.gov/pub/irs-irbs/
irb10-01.pdf, or the current superseding
revenue procedure.
Line 2c. If you are amending your
previously approved SEP or SIMPLE IRA
plan, enter the letter serial number, date,
and file folder number from the latest
opinion letter you received for your SEP
or SIMPLE IRA plan.
Line 3. If the application is for a SEP
that provides for elective deferrals
intended to meet the requirements of
section 408(k)(6), check the box.

provide the information requested on
this form. Section 6109 requires you to
provide the requested identification
numbers. Failure to provide the
information may delay or prevent
processing your application; providing
any false information may subject you to
penalties.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records
relating to a form or its instructions must
be retained as long as their contents
may become material in the
administration of any Internal Revenue
law.
Generally, tax returns and return
information are confidential, as stated in
section 6103. However, section 6103
allows or requires the Internal Revenue
Service to disclose or give such
information to the Department of Justice
for civil and criminal litigation, and to
cities, states, the District of Columbia,
U.S. commonwealths and possessions
for use in administering their tax laws.
We may also disclose this information to
other countries under a tax treaty, to
federal and state agencies to enforce
federal nontax criminal laws, or to
federal law enforcement and intelligence
agencies to combat terrorism.

DRAFT AS OF
July 29, 2010

Note. The IRS will not issue an opinion
letter on a document submitted with
Form 5306-A that is a combination of a
prototype SEP or SIMPLE IRA plan and
a prototype individual retirement account
or annuity.
What to file. File this application and
one copy of all documents that make up
the SEP agreement or SIMPLE IRA plan.
If this is an amendment, include a
copy of the amendment and an
explanation of its effect on the SEP
agreement or SIMPLE IRA plan.
Where to file. File Form 5306-A with the
Internal Revenue Service, Attention: EP
Opinion Letters, P.O. Box 27063,
McPherson Station, Washington, DC
20038.

Deleted "/Advisory"

The Small Business Job Protection Act
of 1996 (P.L. 104-188) repealed section
408(k)(6), effective December 31, 1996,
except with respect to a SEP of an
employer if the terms of the SEP of such
employer, as in effect on December 31,
1996, provided for elective deferrals.

3

The time needed to complete and file
this form will vary depending on
individual circumstances. The estimated
average time is:

Line 4a. Address. Include the suite,
room, or other unit number after the
street number. If the Post Office does
not deliver mail to the street address
and you have a P.O. box, show the box
number instead of the street address.

Learning about the law
or the form . . . . . 1 hr., 23 min.

Privacy Act and Paperwork
Reduction Act Notice

Preparing, copying, assembling,
and sending the form
to the IRS . . . . . . 1 hr., 42 min.

We ask for the information on this form to
carry out the Internal Revenue laws of the
United States. We need it to ensure that
you are complying with these laws and to
allow us to figure and collect the right
amount of tax. This information is needed
to process your application and to
determine whether your prototype SEP or
SIMPLE IRA plan meets the requirements
of section 408(k) or 408(p). You are not
required to apply for approval; however, if
you want to receive an opinion letter from
the IRS regarding your prototype SEP or
SIMPLE IRA plan, you are required to

Deleted previous 1st para.

Recordkeeping .

.

.

15 hr., 46 min.

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form
simpler, we would be happy to hear from
you. You can write to the Internal
Revenue Service, Tax Products
Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Ave. NW, IR-6526, Washington, DC
20224. Do not send the form to this
address. Instead, see Where to file on
this page.