Rp2005-16

Part III. Administrative, Procedural, and Miscellaneous
26 CFR 601.201: Rulings and determination letters.
(Also, Part I, §§ 401, 403 and 501; 1.401(a)–1, 1.403(a)–1, 1.501(a)–1.)

Rev. Proc. 2005–16
TABLE OF CONTENTS
SECTION 1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675
SECTION 2. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675
SECTION 3. OVERVIEW OF THE REVENUE PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675

PART I — M&P PLANS
SECTION 4. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677
SECTION 5. PROVISIONS REQUIRED IN EVERY M&P PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679
SECTION 6. OPINION LETTERS — SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 680
SECTION 7. OPINION LETTERS — INSTRUCTIONS TO SPONSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681
SECTION 8. APPROVED PLANS — MAINTENANCE OF APPROVED STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682
SECTION 9. WITHDRAWAL OF REQUESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682
SECTION 10. ABANDONED PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682
SECTION 11. RECORD KEEPING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683
SECTION 12. M&P MASS SUBMITTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 683

PART II — VOLUME SUBMITTER PLANS
SECTION 13. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
SECTION 14. PROVISIONS REQUIRED IN EVERY VOLUME SUBMITTER PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 686
SECTION 15. APPROVED PLANS — MAINTENANCE OF APPROVED STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687
SECTION 16. ADVISORY LETTERS — SCOPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
SECTION 17. ADVISORY LETTERS — INSTRUCTIONS TO VS PRACTITIONERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 688
SECTION 18. VS MASS SUBMITTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689

PART III — ALL PRE-APPROVED PLANS
SECTION 19. EMPLOYER RELIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 689
SECTION 20. WHERE TO FILE AND OTHER RULES FOR APPLICATIONS AND LETTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691
SECTION 21. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692
SECTION 22. REVOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692
SECTION 23. EGTRRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692
SECTION 24. REMEDIAL AMENDMENT PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693
SECTION 25. EFFECT ON OTHER DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

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2005–10 I.R.B.

SECTION 26. EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693
SECTION 27. PAPERWORK REDUCTION ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693

SECTION 1. PURPOSE
.01 This revenue procedure sets forth
the Service’s procedures for issuing opinion and advisory letters regarding the acceptability under § 401 and § 403(a) of the
Internal Revenue Code (the “Code”) of the
form of pre-approved plans (that is, master and prototype (M&P) and volume submitter (VS) plans). The revenue procedure
revises the existing procedures to eliminate several of the differences between the
M&P and VS programs while maintaining
the distinctive features of each program.
.02 This revenue procedure provides
that the Service will accept applications
for opinion and advisory letters beginning
February 17, 2005, for defined contribution pre-approved plans that take into account the requirements of the Economic
Growth and Tax Relief Reconciliation Act
of 2001, Pub. L. 107–16 (EGTRRA) as
well as other changes in qualification requirements and guidance. The submission
period for these pre-approved plans will
end on January 31, 2006. The Service will
announce the deadline for timely adoption
by employers after the pre-approved documents have been reviewed. In addition, the
Service intends to accept applications for
determination letters for individually designed plans beginning on or after February 1, 2006, and applications for opinion
and advisory letters for pre-approved defined benefit plans beginning February 1,
2007. The opening of these programs will
be announced at a future date.
SECTION 2. BACKGROUND
.01 The procedures of the Service on the
issuance of opinion letters regarding the
acceptability of the form of M&P plans are
set forth in Rev. Proc. 2000–20, 2000–1
C.B. 553, as modified. This revenue procedure modifies and supersedes Rev. Proc.
2000–20.
.02 Rev. Proc. 2005–6, 2005–1 I.R.B.
200, sets forth the general procedures of
the Service on the issuance of employee
plan determination letters and advisory letters regarding the acceptability of the form
of volume submitter plans.
.03 Notice 2001–42, 2001–2 C.B. 70,
and Rev. Proc. 2005–6 provide that opin-

2005–10 I.R.B.

ion, advisory and determination letters that
take into account EGTRRA will not be issued until further notice.
.04 Announcement 2004–33, 2004–18
I.R.B. 862, contains a draft revenue procedure that applies to both the M&P and VS
programs, with the rules for issuing opinion letters and advisory letters for pre-approved plans. This revenue procedure finalizes and replaces the draft revenue procedure in Announcement 2004–33.
.05 Announcement 2004–71, 2004–40
I.R.B. 569, contains a draft revenue procedure that describes procedures for implementing a system of six-year remedial
amendment cycles for pre-approved plans
and five-year staggered remedial amendment cycles for individually designed
plans. Under the draft revenue procedure,
sponsors and practitioners of pre-approved
plans must submit requests for opinion or
advisory letters by a specified time period
within a six-year cycle in order to continue
to rely on their opinion or advisory letters.
The draft revenue procedure on remedial
amendment cycles is expected to be finalized in the near future.
.06 Announcement 2004–71 also contains a discussion of the annual Cumulative List of Changes in Plan Qualification
Requirements (Cumulative List). This Cumulative List identifies statutory changes
and other guidance affecting qualification requirements that are considered by
the Service in its review of plans for the
applicable cycle. The 2004 Cumulative
List was published in Notice 2004–84,
2004–52 I.R.B. 1030. This 2004 Cumulative List was issued in conjunction with
the opening of the EGTRRA opinion and
advisory letter program providing that the
Service will accept applications with respect to defined contribution pre-approved
plans beginning February 17, 2005, and
ending January 31, 2006, as set forth in
section 23 of this revenue procedure. The
2004 Cumulative List reflects law changes
under EGTRRA with technical corrections
made by the Job Creation and Worker Assistance Act of 2002, Pub. L. 107–147
(JCWAA), as well as regulations and
guidance published by the Service that
are effective after December 31, 2001.
However, in order to be qualified, a plan

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must comply with all relevant qualification requirements, not just those on the
2004 Cumulative List. The Service will
not review plan language for guidance
issued after December 14, 2004, unless
it is on the 2004 Cumulative List. Thus,
sponsors of pre-approved plans generally
may not rely on opinion or advisory letters
with respect to any guidance issued after
December 14, 2004, unless that guidance
is on the 2004 Cumulative List.
SECTION 3. OVERVIEW OF THE
REVENUE PROCEDURE
.01 Single Revenue Procedure — The
Service maintains two programs for the
“pre-approval” of plans qualified under
§ 401 and § 403(a) — the M&P program
and the VS program. The two programs
originated to serve different purposes and
each has had its own set of rules. Until
now, those rules were contained in different revenue procedures. In recent years,
there have been changes that have eliminated several of the distinctions between
the two programs. While the Service will
continue to maintain the two programs
separately, the narrowing of the differences between the programs makes it
appropriate to set forth the rules for both
programs in a single revenue procedure.
.02 Program Changes — The fundamental distinction between M&P and VS
plans is unchanged by this revenue procedure. That is, M&P plans will generally
continue to consist of a basic plan document and adoption agreement that may not
be amended by adopting employers, except by choosing among permitted options
under the adoption agreement, without the
loss of M&P status. VS plans will continue
to be allowed in either adoption agreement
or “individually designed” format and employer amendments will not cause the loss
of VS status provided the extent and complexity of the amendments are not inconsistent with the purposes of the VS program. However, the revenue procedure
eliminates some of the other differences
between the M&P and VS programs. The
principal changes are as follows:
(1) The revenue procedure eliminates the requirement that the alloca-

March 7, 2005

tion or benefit formula in a nonstandardized M&P plan satisfy the uniformity requirements for safe harbor
plans under § 1.401(a)(4)–2(b)(2) or
§ 1.401(a)(4)–3(b)(2) of the Income Tax
Regulations.
This change will allow
adopting employers of nonstandardized
defined contribution M&P plans to adopt
an allocation formula that is designed
to be cross-tested for nondiscrimination
on the basis of equivalent benefits under
§ 1.401(a)(4)–8.
(2) The revenue procedure permits, but
does not require, VS plans to include a provision that allows the VS practitioner to
amend the plan on behalf of adopting employers. By choosing to include such a
provision in the VS plan, the VS practitioner agrees to comply with certain record
keeping and notice requirements that apply to sponsors of M&P plans. The Service
will evaluate this new feature over time to
determine whether to preserve it as a permanent feature of the VS program.
(3) The revenue procedure simplifies
and streamlines the two programs. For example, under the procedure, nonstandardized safe harbor plans and paired standardized plans are discontinued as separate categories of M&P plans. This change has
been made because recent changes in law
and the procedures for employer reliance
have diminished the utility of these types
of plans.
.03 Additional Changes in this Revenue
Procedure
Announcement 2004–33 contained a
draft revenue procedure setting forth the
rules for both the M&P and VS programs.
The Service sought public comment before finalizing these procedures. This
final revenue procedure retains the general
structure and much of the substance of
the draft, including the program changes
listed in 3.02 above that were also contained in the draft. However, the Service
has made additional changes to the revenue procedure after considering specific
recommendations from commentators. In
addition to minor revisions and clarifying language, the following changes have
been made:
(1) The definition of VS practitioner
is expanded. Generally, a VS practitioner
must have at least 30 employer-clients
reasonably expected to timely adopt a plan
that is substantially similar to the VS practitioner’s specimen plan. This revenue

March 7, 2005

procedure lowers the requirement for a
VS practitioner, so that it may have 10
employer/clients reasonably expected to
timely adopt a money purchase pension
plan (MP Plan), but only if a practitioner
has a specimen MP Plan and at least one
other type of specimen plan. (sec. 13.04)
(2) The number of trust or custodial account documents that may be submitted by
an M&P sponsor or mass submitter with a
single plan document is increased from 5
to 10. Additional submissions of trusts or
custodial account documents will be permitted for an additional fee. (sec. 4.05)
(3) The category of plans eligible for
advisory letters is expanded to include
VS plans that provide for non safe-harbor hardship distributions under § 401(k),
provided that nondiscriminatory and objective criteria are contained in the plans.
(sec. 16.02)
(4) The category of plans eligible for
advisory letters is expanded to include defined benefit plans that provide for employee contributions, by eliminating this
category from the list of plans not covered
by advisory letters. (sec. 16)
(5) The category of plans not eligible
for advisory or opinion letters is revised to
include plans designed to satisfy the provisions of § 105. (secs. 6.03(20) and
16.02(19))
(6) The instructions to VS practitioners are revised to specify that one specimen plan and application is required for a
VS profit-sharing plan, with or without a
§ 401(k) arrangement. (sec. 17.03)
(7) The submission procedure for modifications of M&P mass submitter plans
has been clarified to provide that an M&P
mass submitter should submit only the first
page of the applicable form along with the
applicable fee as part of an initial submission, rather than the entire plan document.
(sec. 12.03(2))
(8) The procedures for issuing opinion letters to M&P mass submitters and
sponsors, and advisory letters to VS mass
submitters and practitioners have been
changed to provide that the Service will
send an interim email notifying an M&P or
VS mass submitter, sponsor or practitioner
that review of the applicable plan has been
completed, subject to final approval in
the form of an opinion or advisory letter.
(sections 7.07, 12.01, 17.05, 18.01)
(9) The requirement of word-for-word
identical documents in order for an em-

676

ployer to have reliance is clarified to
provide that typographical errors and
cross-references may be corrected without affecting reliance, provided that these
corrections do not change the original
intended meaning or impact any qualification requirements, and an employer may
adopt model, sample or other required
good faith amendments. (sec. 19.03)
(10) The provisions on employer reliance have been expanded to specify that
an adopting employer of a VS plan may
rely on an advisory letter with respect to
the nondiscrimination in amounts requirement under § 401(a)(4) when the adopting
employer selects and utilizes certain design-based safe harbors and compensation
definitions, under the conditions specified.
(sec. 19.02)
(11) The provision on remedial amendment cycles is clarified to specify the circumstances in which the six-year remedial
amendment cycle applies to an employer
that has adopted a VS or M&P plan and has
changed the plan so that it is considered to
be an individually designed plan. (sec. 24)
(12) The VS provisions have been clarified to specify that amending the administrative provisions of the trust or custodial documents is allowed. This language
is identical to the provisions that apply
to nonstandardized M&P plans in section
5.09. (sec. 14)
(13) The definition of “National Sponsor” and “VS Practitioner” is revised to
include a sponsor or practitioner that has
3000 or more adopting employers or 30
or more adopting employers in 30 or more
states. This definition was included in Announcement 2004–33 but was not in the
draft revenue procedure attached to that
announcement. (sec. 4.09 and 13.04)
(14) The VS submission procedures
specify that Form 4461 is being revised
to incorporate VS applications. Until the
Form is published, the VS submission
must include a cover letter requesting approval. (sec. 17.02)
(15) The application procedure is
streamlined to provide that VS and M&P
applications are now submitted to the
same address. This address was formerly
used for VS applications but is a change of
address for M&P applications. (sec. 20)
(16) The revocation procedures contain
a requirement that the content of the notification to each adopting employer must ex-

2005–10 I.R.B.

plain how the revocation affects reliance.
(sec. 22)
(17) The provision on employer amendments is revised to specify that sample,
model or other required good faith amendments adopted by certain employers will
not cause the plan to be individually designed. (sec. 5.02, sec. 15, sec. 19)
(18) The provision on amendments of
M&P mass submitter plans is revised to
include references to sample or model
amendments. (sec. 12.04)
(19) The revenue procedure is revised
throughout so that its provisions are consistent with the draft revenue procedure attached to Announcement 2004–71 on remedial amendment periods.
.04 Provisions Related to EGTRRA
— This revenue procedure announces the
opening of the pre-approved defined contribution plan programs as of February
17, 2005, for EGTRRA and other applicable guidance. The 2004 Cumulative
List reflects law changes under EGTRRA
including technical corrections made by
JCWAA as well as regulations and guidance published by the Service that are
effective after December 31, 2001, that
will be considered by the Service in its review of plans. Section 23 of this revenue
procedure provides further details on the
scope of this Cumulative List. This Cumulative List will be updated and published
annually to identify statutory, regulatory
and guidance changes that will be considered by the Service in its review of plans
whose remedial amendment cycles are
proposed to end on the January 31 of the
second calendar year following publication of the list.
.05 Remedial Amendment Period — In
Announcement 2004–71, the Service included a draft revenue procedure containing the Service’s procedures for issuing
opinion and advisory letters for pre-approved plans under a regular, six-year remedial amendment cycle under § 401(b)
of the Internal Revenue Code. The draft
also contains procedures for issuing determination letters under a staggered remedial amendment period system that establishes regular, five-year cycles for determination letters for individually designed
plans. The Service intends to issue guidance that will supersede and finalize the
draft revenue procedure attached to Announcement 2004–71 in the near future.

2005–10 I.R.B.

PART I — M&P PLANS
SECTION 4. DEFINITIONS
.01 Master Plan — A “master plan” is
a plan (including a plan covering self-employed individuals) that is made available
by a sponsor for adoption by employers
and for which a single funding medium
(for example, a trust or custodial account)
is established, as part of the plan, for the
joint use of all adopting employers. A
master plan consists of a basic plan document, an adoption agreement, and, unless
included in the basic plan document, a trust
or custodial account document.
.02 Prototype Plan — A “prototype
plan” is a plan (including a plan covering
self-employed individuals) that is made
available by a sponsor for adoption by
employers and under which a separate
funding medium is established for each
adopting employer. A prototype plan
consists of a basic plan document, an
adoption agreement, and, unless the basic
plan document incorporates a trust or custodial account agreement the provisions
of which are applicable to all adopting
employers, a trust or custodial account
document.
.03 Basic Plan Document — A “basic plan document” is the portion of a
plan containing all the non-elective provisions applicable to all adopting employers.
No options (including blanks to be completed) may be provided in the basic plan
document, except as provided in section
12.03(1) of this revenue procedure regarding flexible plans.
.04 Adoption Agreement — An “adoption agreement” is the portion of the plan
containing the options that may be selected
by an adopting employer.
.05 Trust or Custodial Account Document (Note: This definition does not apply
if the basic plan document includes a trust
or custodial account agreement the provisions of which apply to all adopting employers.) —
(1) A “trust or custodial account document” is the portion of an M&P plan
that contains the trust agreement or custodial account agreement and includes provisions covering such matters as the powers
and duties of trustees, investment authority, and the kinds of investments that may
be made.

677

(2) Except as provided in section 5.09
and below, all provisions of the trust or
custodial account document must be applicable to all adopting employers of that
trust or custodial account, and no options
(including blanks to be completed) may be
provided in the trust or custodial account
document.
(3) With respect to prototype plans, a
sponsor or mass submitter may provide up
to 10 separate trust or custodial account
documents that are intended for use with
any single basic plan document. Notwithstanding the above, a sponsor or mass submitter may submit more than 10 separate
trust or custodial account documents intended for use with any single basic plan
document, along with an additional user
fee that applies to submissions above the
10 trust (or custodial account) limit. The
amount of the applicable user fee will be
specified in future guidance.
(4) As provided in section 5.09, a sponsor or M&P mass submitter may provide a
trust or custodial account document, designated for use only by adopters of nonstandardized plans, which provides for blanks
to be completed with respect to administrative provisions of the trust or custodial
account agreement.
(5) Any trust or custodial account document (including one to be used by adopters
of standardized plans) may provide for
blanks to be completed that merely enable the adopting employer to specify the
names of the plan, employer, trustee or
custodian, plan administrator and other
fiduciaries, the trust year, and the name of
any pooled trust in which the plan’s trust
will participate.
.06 Opinion Letter — An “opinion letter” is a written statement issued by the
Service to a sponsor or M&P mass submitter as to the acceptability of the form of an
M&P plan under § 401(a) or § 403(a), and,
in the case of a master plan, the acceptability of the master trust under § 501(a).
.07 Sponsor — A “sponsor” is any person that (1) has an established place of
business in the United States where it is accessible during every business day and (2)
represents to the Service that it has at least
30 employer-clients each of which is reasonably expected to timely adopt the sponsor’s basic plan document. The deadline
for timely adoption will be announced by
the Service in future guidance.

March 7, 2005

A sponsor may request opinion letters for
any number of basic plan documents and
adoption agreements provided the 30-employer requirement is met with respect to
at least one basic plan document. The Service reserves the right at any time to request from the sponsor a list of the employers that have adopted or are expected
to adopt the sponsor’s M&P plans, including the employers’ business addresses and
employer identification numbers.
Notwithstanding the above, any person
that has an established place of business
in the United States where it is accessible
during every business day may sponsor a
plan as a word-for-word identical adopter
or minor modifier adopter of a plan of an
M&P mass submitter, regardless of the
number of employers that are expected to
adopt the plan.
By submitting an application for an opinion letter for an M&P plan under this revenue procedure (or by having an application filed on its behalf by an M&P mass
submitter as required for a minor modifier), a person represents to the Service
that it is a sponsor, as defined above, and
agrees to comply with any requirements
imposed on sponsors by this revenue procedure. Failure to comply with these requirements may result in the loss of eligibility to sponsor M&P plans and the revocation of opinion letters that have been issued to the sponsor.
.08 M&P Mass Submitter — An “M&P
mass submitter” is any person that (1) has
an established place of business in the
United States where it is accessible during
every business day and (2) submits opinion letter applications on behalf of at least
30 unaffiliated sponsors each of which is
sponsoring, on a word-for-word identical basis, the same basic plan document.
A flexible plan (as defined in section
12.03(1)) that is adopted by a sponsor will
be considered a word-for-word identical
plan. An M&P mass submitter may submit an opinion letter application on its
own behalf as one of the 30 unaffiliated
sponsors. For purposes of this definition,
affiliation is determined under § 414(b)
and (c). Additionally, the following will
be considered to be affiliated: any law,
accounting, consulting firm, etc., with its
partners, members, associates, etc. An
M&P mass submitter will be treated as an

March 7, 2005

M&P mass submitter with respect to all its
M&P plans provided the 30 unaffiliated
sponsor requirement is met with respect to
at least one basic plan document.
Notwithstanding the above, any person
that received a favorable TRA ’86 opinion
letter for a plan as an M&P mass submitter
under Rev. Proc. 89–9, 1989–1 C.B. 780,
will continue to be treated as an M&P
mass submitter with respect to all its M&P
plans if it submits applications on behalf
of at least 10 sponsors (regardless of affiliation) each of which is sponsoring, on
a word-for-word identical basis, the same
basic plan document.
.09 National Sponsor — A “national
sponsor” is a sponsor that has either (a)
30 or more adopting employers in each of
30 or more states (treating, for this purpose, the District of Columbia as a state)
or (b) 3000 or more adopting employers.
The determination as to whether there are
3000 or more adopting employers or 30
or more adopting employers in each of
30 or more states may be made on any
one date during the 12 month period ending on the date that is 60 days after the
effective date of this revenue procedure.
For this purpose, an adopting employer is
any employer that has adopted any plan of
the sponsor that has a GUST opinion letter. GUST is an acronym for the Uruguay
Round Agreements Act (GATT), the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA),
the Small Business Job Protection Act of
1996 (SBJPA), the Taxpayer Relief Act
of 1997 (TRA ’97), the Internal Revenue
Service Restructuring and Reform Act of
1998 (RRA ’98), and the Community Renewal Tax Relief Act of 2000 (CRA)
.10 Standardized Plan — A “standardized plan” is an M&P plan that meets the
following requirements:
(1) The provisions governing eligibility and participation are such that the plan
by its terms must benefit all employees
described in section 5.13 (regardless of
whether any employer is treated as operating separate lines of business under
§ 414(r)) except those that may be excluded under § 410(a)(1) or (b)(3). The
adoption agreement may provide options
as to whether some or all of the employees described in § 410(a)(1) or (b)(3) are
to be excluded, provided that the criteria for excluding employees described in

678

§ 410(a)(1) or (b)(3) applies uniformly to
all employees. A standardized plan generally may not deny an accrual or allocation to an employee eligible to participate
merely because the employee is not an active employee on the last day of the plan
year or has failed to complete a specified
number of hours of service during the year.
However, the plan may deny an allocation
or accrual to an employee who is eligible
to participate if the employee terminates
service during the plan year with not more
than 500 hours of service and is not an active employee on the last day of the plan
year.
(2) The eligibility requirements under
the plan are not more favorable for highly
compensated employees (as defined in
§ 414(q)) than for other employees.
(3) Under the plan, allocations, in the
case of a defined contribution plan (other
than any cash or deferred arrangement
part of the plan), or benefits, in the case
of a defined benefit plan, are determined
on the basis of total compensation. For
this purpose, total compensation means a
definition of compensation that includes
all compensation within the meaning of
§ 415(c)(3) and excludes all other compensation or that otherwise satisfies § 414(s)
under § 1.414(s)–1(c) of the Income Tax
Regulations.
(4) Unless the plan is a target benefit plan or a § 401(k) and/or § 401(m)
plan, the plan must, by its terms, satisfy
one of the design-based safe harbors described in § 1.401(a)(4)–2(b)(2) (taking
into account § 1.401(a)(4)–2(b)(4)) or in
§ 1.401(a)(4)–3(b)(3), (4), or (5) (taking
into account § 1.401(a)(4)–3(b)(6)).
(5) All benefits, rights, and features under the plan (other than those, if any, that
have been prospectively eliminated) are
currently available to all employees benefiting under the plan.
(6) Any past service credit under
the plan must meet the safe harbor in
§ 1.401(a)(4)–5(a)(3).
A plan will not fail to satisfy the coverage requirement for standardized plans
merely because the plan provides, either
as the result of an elective provision or
by default in the absence of an election to
the contrary, that individuals who become
employees, within the meaning of section
5.13, as the result of a Ҥ 410(b)(6)(C)
transaction” will be excluded from eligi-

2005–10 I.R.B.

bility to participate in the plan during the
period beginning on the date of the transaction and ending on a date that is not later
than the last day of the first plan year beginning after the date of the transaction. A
“§ 410(b)(6)(C) transaction” is an asset or
stock acquisition, merger, or other similar
transaction involving a change in the employer of the employees of a trade or business.
.11 Nonstandardized Plan — A “nonstandardized plan” is an M&P plan that is
not a standardized plan.
SECTION 5. PROVISIONS REQUIRED
IN EVERY M&P PLAN
.01 Sponsor Amendments — M&P
plans must provide a procedure for sponsor
amendment, so that changes in the Code,
regulations, revenue rulings, other statements published by the Internal Revenue
Service, or corrections of prior approved
plans may be applied to all employers
who have adopted the plan. Sponsors
must make reasonable and diligent efforts to ensure that adopting employers
of the sponsor’s M&P plan have actually
received and are aware of all plan amendments and that such employers complete
and sign new adoption agreements when
necessary. See section 5.11. Failure to
comply with this requirement may result
in the loss of eligibility to sponsor M&P
plans and the revocation of opinion letters
that have been issued to the sponsor.
.02 Employer Amendments — An employer that amends any provision of an approved M&P plan including its adoption
agreement (other than to change the choice
of options, if the plan permits or contemplates such a change) or an employer that
chooses to discontinue participation in a
plan as amended by its sponsor and does
not substitute another approved M&P plan
is considered to have adopted an individually designed plan. However, this rule
does not apply in the case of amendments
permitted under sections 5.06 and 5.09 and
sample or model amendments published
by the Service (or other required good faith
amendments) that specifically provide that
their adoption by an adopter of an M&P
plan will not cause such plan to be treated
as individually designed. Also see section 19.03 regarding the effect of employer
amendments on an employer’s ability to
rely on an opinion letter and section 24

2005–10 I.R.B.

with respect to applicable remedial amendment periods. An employer that amends an
M&P plan because of a waiver of the minimum funding requirement under § 412(d)
will also be considered to have an individually designed plan. The procedures stated
in Rev. Proc. 2005–6 relating to the issuance of determination letters for individually designed plans will then apply to the
plan as adopted by the employer.
.03 Compensation Requirements in
Nonstandardized Plans — Each nonstandardized M&P plan must give the adopting
employer the option to select total compensation as the compensation to be used
in determining allocations or benefits. For
this purpose, total compensation means
a definition that includes all compensation within the meaning of § 415(c)(3)
and excludes all other compensation or
that otherwise satisfies § 414(s) under
§ 1.414(s)–1(c).
.04 Automatic or Optional Safe Harbor Provisions in Nonstandardized Plans
— Each nonstandardized M&P plan
must automatically or by option allow the adopting employer to satisfy
one of the design-based safe harbors
described in § 1.401(a)(4)–2(b)(2) or
§ 1.401(a)(4)–3(b)(3), (4), and (5). A
nonstandardized defined contribution plan
is permitted to include allocation formulas which must be general tested under
§ 1.401(a)(4)–2(c) or cross-tested under
§ 1.401(a)(4)–8. A nonstandardized defined benefit plan is permitted to include
benefit formulas that must be general
tested under § 1.401(a)(4)–3(c).
.05 Anti-Cutback Provisions — M&P
plans must specifically provide for the protection provided under § 411(a)(10) and
(d)(6), to the extent required, in the event
that the employer amends the plan in any
manner such as by revising the options
selected in the adoption agreement or by
adopting a new M&P plan. An M&P sponsor may not amend its plan in a manner that
could result in the elimination of a benefit to the extent the benefit is required to
be protected under § 411(d)(6) with respect
to the plan of any adopting employer, unless permitted to do so under §§ 1.401(a)–4
and 1.411(d)–4. In addition, an M&P plan
that does not contain vesting for all years
that is at least as favorable to participants
as that provided in § 416(b), must specifically provide that any vesting that occurs

679

while the plan is top-heavy, will not be cut
back if the plan ceases to be top-heavy.
.06 Adopting Employer Modification to
Satisfy §§ 415 and 416 — M&P plans
must provide that the plan provisions may
be amended by overriding plan language
completed by the employer in the adoption
agreement where such language is necessary to satisfy § 415 or 416 because of
the required aggregation of multiple plans
under these sections. Generally, a space
should be provided in the adoption agreement with instructions for the employer to
add such language as necessary to satisfy
§§ 415 and 416. In addition, a space must
be provided in the adoption agreement for
the employer to specify the interest rate
and mortality tables used for purposes of
establishing the present value of accrued
benefits in order to compute the top-heavy
ratio under § 416. Such a space must be included in both defined contribution plans
and defined benefit plans.
.07 Defined Contribution § 415 Aggregation — Plan language must be incorporated that aggregates all defined contribution M&P plans to satisfy § 415(c) and (f).
Sample language provided in the Listing
of Required Modifications may be downloaded from the Internet at the following
address: http://www.irs.gov.
.08 Top-heavy Requirements — Each
plan must either provide that all the
additional requirements applicable to
top-heavy plans (described in § 416) apply
at all times or provide that such requirements apply automatically if the plan is
top-heavy regardless of how the adoption agreement is completed. In any case
where the latter option is chosen, all the
requirements for determining whether the
plan is top-heavy must be included in the
plan. (See Questions T–35 and T–36 of
§ 1.416–1.)
.09 Adopting Employer Modification
of Trust or Custodial Account Document
— An employer that adopts a nonstandardized M&P plan will not be considered to have an individually designed plan
merely because the employer amends administrative provisions of the trust or custodial account document (such as provisions relating to investments and the duties
of trustees), provided the amended provisions are not in conflict with any other provision of the plan and do not cause the plan
to fail to qualify under § 401(a). For this
purpose, an amendment includes modifi-

March 7, 2005

cation of the language of the trust or custodial account document and the addition
of overriding language.
An employer that adopts a standardized
M&P plan may amend the trust or custodial account document provided such
amendment merely involves the specification of the names of the plan, employer,
trustee or custodian, plan administrator
and other fiduciaries, the trust year, or
the name of any pooled trust in which the
plan’s trust will participate.
.10 Provisions Required in Adoption
Agreements Regarding Reliance — The
adoption agreement of every nonstandardized M&P plan must include, in close
proximity to the signature blank, a statement that describes the limitations on
employer reliance on an opinion letter
without a determination letter and the
circumstances under which an employer
will have no reliance without a determination letter. See section 19.02 and section
19.03. Standardized plans must also include a similar statement in the adoption
agreement that the adopting employer may
not rely on the opinion letter issued by the
Service but must apply for a determination
letter to have reliance under the circumstances described in section 19.01.
.11 Other Provisions Required in Adoption Agreements — Each M&P plan must
contain a dated employer signature line.
The employer must sign the adoption
agreement when it first adopts the plan and
must complete and sign a new adoption
agreement if the plan has been restated.
In addition, the employer must complete
a new signature page if it modifies any
prior elections or makes new elections
in its adoption agreement. The signature
requirement may be satisfied by an electronic signature that reliably authenticates
and verifies the adoption of the adoption
agreement, or restatement, amendment
or modification thereof, by the employer.
The adoption agreement must state that
it is to be used with one and only one
specific basic plan document. In addition,
the adoption agreement must contain a
cautionary statement to the effect that the
failure to properly fill out the adoption
agreement may result in failure of the plan
to qualify. The adoption agreement must
also contain a statement that provides that
the sponsor will inform the adopting employer of any amendments made to the

March 7, 2005

plan or of the discontinuance or abandonment of the plan.
.12 Sponsor Telephone Numbers —
M&P plan adoption agreements must include the sponsor’s name, address and
telephone number (or a space for the
address and telephone number of the
sponsor’s authorized representative) for
inquiries by adopting employers regarding
the adoption of the plan, the meaning of
plan provisions, or the effect of the opinion letter.
.13 Definition of Employee / § 414(b),
(c), (m), (n) and (o) — Each M&P plan
must include a definition of employee as
any employee of the employer maintaining the plan or any other employer aggregated under § 414(b), (c), (m) or (o) and
the regulations thereunder. The definition
of employee shall also include any individual deemed under § 414(n) (or under regulations under § 414(o)) to be an employee
of any employer described in the previous
sentence.
.14 Definition of Service / § 414(b), (c),
(m), (n), and (o) — Each M&P plan must
specifically credit all service with any employer aggregated under § 414(b), (c), (m)
or (o) and the regulations thereunder as
service with the employer maintaining the
plan. In addition, in the case of an individual deemed under § 414(n) (or under regulations under § 414(o)) to be the employee
of any employer described in the previous
sentence, service with such employer must
be credited to such individual.
SECTION 6. OPINION LETTERS —
SCOPE
.01 General Limits on Opinion Letters
— Opinion letters will be issued only to
sponsors or M&P mass submitters. Opinion letters constitute determinations as to
the qualification of the plans as adopted
by particular employers only under the circumstances, and to the extent, described in
section 19. In the case of prototype plans,
opinion letters do not constitute rulings or
determinations as to the exempt status of
related trusts or custodial accounts.
.02 Nonapplicability of the Procedure
to IRAs and SEPs — Opinion letters will
not be issued under this revenue procedure
for prototype plans intended to meet the
requirements for individual savings programs or simplified employee pension programs under § 408 (see Rev. Proc. 87–50,

680

1987–2 C.B. 647, Rev. Proc. 97–29,
1997–1 C.B. 698, and Rev. Proc. 98–59,
1998–2 C.B. 727).
.03 Areas Not Covered by Opinion Letters — Opinion letters will not be issued
for:
(1) Multiemployer plans and multiple
employer plans;
(2) Union plans (This does not preclude
an M&P plan from covering employees of
the employer who are included in a unit
covered by a collective bargaining agreement or the adoption of an M&P plan pursuant to such agreement as a single employer plan that covers only employees of
the employer.);
(3) Stock bonus plans;
(4) Employee stock ownership plans;
(5) Pooled fund arrangements contemplated by Rev. Rul. 81–100, 1981–1 C.B.
326 (as modified by Rev. Rul. 2004–67,
2004–28 I.R.B. 28);
(6) Annuity contracts under § 403(b);
(7) All cash balance plans and any
other defined benefit plans (regardless of
whether they are cash balance plans) under which the test for nondiscrimination
under § 401(a)(4) is made by reference to
contributions rather than benefits;
(8) Plans described in § 414(k) (relating to a defined benefit plan that provides
a benefit derived from employer contributions that is based partly on the balance of
the separate account of a participant);
(9) Target benefit plans, other than
plans which, by their terms, satisfy each of
the safe harbor requirements described in
§ 1.401(a)(4)–8(b)(3)(i), as well as the additional rules in § 1.401(a)(4)–8(b)(3)(ii)
through (vii);
(10) Defined benefit plans that provide
for employee contributions;
(11) Plans that would not satisfy the
qualification requirements except as governmental plans as described in § 414(d);
(12) Church plans described in § 414(e)
that have not made the election provided
by § 410(d);
(13) Plans under which the § 415 limitations are incorporated by reference;
(14) Plans that incorporate the ADP test
under § 401(k)(3) or the ACP test under
§ 401(m)(2) by reference;
(15) Section 401(k) plans (standardized and nonstandardized) that provide
for hardship distributions under circumstances other than those described in the

2005–10 I.R.B.

safe harbor standards in the regulations
under § 401(k);
(16) Fully-insured § 412(i) plans, other
than plans that, by their terms, satisfy
the safe harbor for § 412(i) plans in
§ 1.401(a)(4)–3(b)(5);
(17) Plans that fail to contain a provision reflecting the requirements of
§ 414(u) (see Rev. Proc. 96–49, 1996–2
C.B. 369);
(18) Plans that include so-called failsafe provisions for § 401(a)(4) or the average benefit test under § 410(b);
(19) Plans that include blanks or fill-in
provisions for the employer to complete
unless the provisions have parameters that
preclude the employer from completing
the provisions in a manner that could violate the qualification requirements.
(20) Plans designed to satisfy the provisions of § 105.
The Service may, in its discretion, decline
to issue opinion letters for other types of
plans not described in this section 6.03.
SECTION 7. OPINION LETTERS —
INSTRUCTIONS TO SPONSORS
.01 Employee Plans Rulings and Agreements Issues Opinion Letters — Employee
Plans Rulings and Agreements will, upon
the request of a sponsor, issue an opinion
letter as to the acceptability of the form of
the sponsor’s M&P plan and any related
trust or custodial account under §§ 401(a),
403(a), and 501(a).
.02 Procedure for Requesting Opinion
Letters — A request for an opinion letter
relating to an M&P plan must be submitted on the current version of Form 4461,
Application for Approval of Master or Prototype Defined Contribution Plan, Form
4461–A, Application for Approval of Master or Prototype Defined Benefit Plan, or
Form 4461–B, Application for Approval of
Master or Prototype Plan Mass Submitter Adopting Sponsor, as appropriate. The
forms (and instructions) specify what to include with the application. These forms
may be downloaded from the Internet at
the following address: http://www.irs.gov.
All information on the first page of the application must be typed. The request must
be sent to the address in section 20. The
Service intends to revise Form 8717, User
Fee for Employee Plan Determination Letter Request, so that it applies to a request

2005–10 I.R.B.

for an opinion letter under the M&P program. Until the form has been revised, an
M&P request should continue to include
the applicable user fee with the submission.
.03 Expediting Review of Substantially
Identical Plans — The Service reserves the
right to review applications in any order
that will expedite the processing of opinion letter applications, subject to section
21.03. To expedite the review of substantially identical plans that are not mass submitter plans, the Service encourages plan
drafters and sponsors to include with each
opinion letter application, where it is appropriate, a cover letter setting forth the
following information:
(1) The name and file folder number
(if available) of the plan that, for review
purposes, the plan drafter designates as the
“lead plan” (including the name and EIN
of the sponsor);
(2) A list of all plans written by the
plan drafter that are substantially identical
to the lead plan (including the information
described in (1) above);
(3) A description of each place where
the plan for which the application is being
submitted is not word-for-word identical
to the language of the lead plan, including
an explanation of the purpose and effect of
each such difference; and
(4) A certification, made under penalty
of perjury by the plan drafter, that the information described in (3) above is true and
complete.
If the sponsor or plan drafter is aware that
a lead plan or any substantially identical
plan has been assigned for review to a specialist, the cover letter should also indicate the name of specialist, if possible. To
the extent feasible, lead plans and substantially identical plans should be submitted
together. The Service will regard the information and certification described in (3)
and (4) above as a material representation
for purposes of issuing an opinion letter.
.04 Separate Applications Required for
Different Categories of M&P Plans / Use
of Same Basic Plan Document by Multiple
Plans — An M&P plan shall not contain
any combination of profit-sharing, money
purchase (other than target benefit), target
benefit, non-integrated defined benefit, or
integrated defined benefit plan features.
However, separate defined contribution
plans may have the same basic plan doc-

681

ument and separate defined benefit plans
may have the same basic plan document,
but the provisions of the basic plan document must be identical for all plans using
that document (that is, no elective or optional features). For example, a sponsor
may submit four plans with respect to a
given defined benefit basic plan document:
integrated standardized and nonstandardized; and nonintegrated standardized and
nonstandardized plans. A sponsor may
also use one defined contribution basic
plan document for a money purchase plan,
a target benefit plan, and a profit-sharing plan. One basic plan document may
not be used with respect to both defined
benefit and defined contribution plans.
A separate adoption agreement and completed application form must be submitted
with respect to each defined benefit plan
and each defined contribution plan. In
the case of a simultaneous submission of
plans using the same basic plan document,
only one copy of the basic plan document
should be provided. If the requests are not
simultaneous, the sponsor must submit
a copy of the basic plan document with
each submission and include a cover letter
identifying the original submission. The
number of such basic plan document must
remain the same as in the prior submission.
.05 Sample Language — A Listing of
Required Modifications (LRM) containing sample language to be used in drafting
M&P plans is available from Employee
Plans Rulings and Agreements. Such
language is not automatically required in
M&P plans but should be used as a guide
in drafting such plans. To expedite the
review of their plans, sponsors are encouraged to use LRM language and to identify
where such language is being used in their
plan documents. LRMs may be downloaded from the Internet at the following
address: http://www.irs.gov.
.06 Material Furnished to Adopting
Employers — A sponsor must furnish
each adopting employer with a copy of the
approved plan, copies of any subsequent
amendments, and the most recently issued
Internal Revenue Service opinion letter.
.07 Timing of Issuance of Opinion Letters — The Service intends to issue opinion letters to M&P mass submitters and
sponsors (as well as advisory letters to VS
mass submitters and practitioners) at approximately the same time within the ap-

March 7, 2005

plicable 6-year cycle. In the interim, the
Service will send an email to the applicable M&P or VS mass submitter, sponsor, or practitioner, if the Service determines that the plan appears to be in full
compliance with the applicable qualification requirements, based on the submissions and the completed review. Notwithstanding the above, this email only provides assurance that the Service believes
the plan appears to meet the applicable
qualification requirements under review as
of the date of the email. This email correspondence is for the convenience of the applicable sponsor, practitioner or mass submitter, but does not constitute an official
opinion or advisory letter. Until issuance
of the official opinion or advisory letter no
reliance exists. In addition, the Service reserves the right to require changes after the
email is sent, in its sole discretion.
SECTION 8. APPROVED PLANS
— MAINTENANCE OF APPROVED
STATUS
.01 Cumulative List in Six-Year Cycle
— Future guidance described in section
3.05 of this revenue procedure will provide that sponsors of pre-approved M&P
plans must submit requests for opinion letters by a specified time period within a
six-year cycle in order to continue to rely
on their opinion letters. Sponsors may apply for opinion letters at other times, but
these filings will be “off-cycle” filings as
described in section 21.03. The Service
will review the plans that have been submitted by the specified time period within
a six-year cycle taking into account the
applicable Cumulative List that identifies
changes in the qualification requirements
of the Code as well as items of published
guidance relating to the plan qualification
requirements, such as regulations and revenue rulings. However, in order to be qualified, a plan must comply with all relevant
qualification requirements, not just those
on the applicable Cumulative List. The letter will not take into account, and a sponsor
may not rely on opinion letters with respect
to, statutory changes enacted, and/or any
guidance issued, after the issuance of the
applicable Cumulative List, unless those
changes and/or guidance are listed on the
applicable Cumulative List.
.02 Subsequent Required Amendments
— Except as otherwise provided in future

March 7, 2005

guidance, in the event of changes in qualification requirements resulting from future guidance, or other regulatory or statutory changes that were not taken into account in issuing the opinion letter, an approved M&P plan must be amended by the
sponsor and, if necessary, the employer,
to retain its approved status if any provisions therein fail to meet the requirements
of law, regulations, or other issuances and
guidelines affecting qualification. Failure
to so amend could result in the loss of a
plan’s qualified status. However, this does
not change the applicable period during
the six-year cycle when sponsors must request opinion letters, which will still occur only once every six years. Sponsors
are required to make reasonable and diligent efforts to ensure that each employer
which, to the best of the sponsor’s knowledge, continues to maintain the plan as an
M&P plan, amends its plan when necessary.
Even if future guidance provides that
the plan need not be amended during a six
year cycle to reflect a change in the qualification requirements, the plan must operationally comply with any changes in qualification requirements and the terms of the
plan as ultimately amended to reflect the
change. Failure to comply with this or any
other requirement imposed on sponsors by
this revenue procedure may result in the
loss of eligibility to sponsor M&P plans
and the revocation of opinion letters that
have been issued to the sponsor.
.03 Amendments Following Revenue
Rulings — If an approved M&P plan is required to be amended to retain its approved
status as a result of publication by the Service of a revenue ruling, notice or similar statement in the Internal Revenue Bulletin (I.R.B.), with changes that were not
taken into account in issuing the opinion
letter then, unless specifically stated otherwise in the revenue ruling, etc., the time
by which the sponsor must amend its M&P
plan to conform to the requirements of the
revenue ruling, etc., shall be the end of the
one-year period after its publication in the
I.R.B., and with respect to any adopting
employer’s plan the effective date of such
amendment shall be the first day of the first
plan year beginning within such one-year
period. As noted in section 8.02, this does
not change the applicable period during the
six-year cycle when sponsors must request
opinion letters, which will still only oc-

682

cur once every six years. Further, sponsors must make reasonable and diligent efforts to ensure that each employer amends
its plan when necessary as noted in section
8.02.
.04 Adopting Employers — The Service will announce when adopting employers must adopt amendments to comply
with new guidance issued by the Service.
Regardless of when amendments are required to be made, adopting employers
must operationally comply as of the applicable effective date of the new guidance.
.05 Loss of Qualified Status — If a
sponsor reasonably concludes that an employer’s M&P plan may no longer be a
qualified plan and the sponsor does not or
cannot submit a request to correct the qualification failure under the Employee Plans
Compliance Resolution System (EPCRS),
it is incumbent on the sponsor to notify the
employer that the plan may no longer be
qualified, advise the employer that adverse
tax consequences may result from loss of
the plan’s qualified status, and inform the
employer about the availability of EPCRS.
See Rev. Proc. 2003–44, 2003–1 C.B.
1051.
SECTION 9. WITHDRAWAL OF
REQUESTS
.01 Notification and Effect — A sponsor may withdraw its request for an opinion letter at any time prior to the issuance
of such letter by notifying EP Rulings and
Agreements in writing of such withdrawal.
The sponsor must also notify each employer who adopted the plan that the request has been withdrawn. Such an employer will be deemed to have an individually designed plan.
.02 Service Retains Information —
Even though a request is withdrawn, EP
Rulings and Agreements will retain all
correspondence and documents associated
with that request and will not return them
to the sponsor. EP Rulings and Agreements may furnish its views concerning
the qualified status of the plan to EP Examinations, which has audit jurisdiction
over the returns of the employers that have
adopted the plan.
SECTION 10. ABANDONED PLANS
.01 Notification to the Service — A
sponsor should notify EP Rulings and

2005–10 I.R.B.

Agreements in writing of an approved
M&P plan that is no longer used by any
employer and which the sponsor no longer
intends to offer for adoption. Such written
notification should be sent to the address
in section 20 and should refer to the file
folder number appearing on the latest
opinion letter issued.
.02 Notification to Employers — A
sponsor that intends to abandon an approved M&P plan that is in use by any
adopting employer must inform each
adopting employer that the form of the
plan has been terminated, that the employer’s plan will become an individually
designed plan (unless the employer adopts
another approved M&P plan), and that
any employer reliance will not continue if
there is a change in law or other change
in the qualification requirements. After
so informing all adopting employers, the
sponsor should notify EP Rulings and
Agreements in accordance with subsection .01 above.
SECTION 11. RECORD KEEPING
REQUIREMENTS
.01 Filing of Opinion Letter Application Constitutes Agreement to Comply
with Record Keeping Requirements — By
submitting an application for an opinion
letter under this revenue procedure (or by
having an application filed on its behalf
by an M&P mass submitter), an M&P
plan sponsor agrees, as provided in section 4.07, to comply with the requirements
imposed on the sponsor by this revenue
procedure, including the record keeping
requirements of this section. Failure to
comply with the requirements imposed on
the sponsor by this revenue procedure may
result in the loss of eligibility to sponsor
M&P plans and the revocation of opinion
letters that have been issued to the sponsor.
.02 Maintenance and Availability of
Records of Adopting Employers — An
M&P plan sponsor must maintain, or
have maintained on its behalf, for each
of its plans, a record of the names, business addresses, and taxpayer identification numbers of all employers that have
adopted the plan. However, a sponsor
need not maintain records with respect to
employers that, to the best of the sponsor’s
knowledge, ceased to maintain the plan
as an M&P plan more than three years
earlier. Upon written request, a sponsor

2005–10 I.R.B.

must provide to the Service a list of such
adopting employers that indicates, to the
best of the sponsor’s knowledge, which of
such employers continue to maintain the
plan as an M&P plan and which of such
employers have ceased to maintain the
plan as an M&P plan within the preceding
three years.
SECTION 12. M&P MASS
SUBMITTERS
.01 Opinion Letters Issued to M&P
Mass Submitters —
(1) EP Rulings and Agreements will,
upon request by an M&P mass submitter, as defined in section 4.08, issue an
opinion letter as to the acceptability of the
form of the mass submitter’s M&P plan
and any related trust or custodial account
under §§ 401(a), 403(a), and 501(a). With
respect to its plan, the M&P mass submitter must submit a completed Form 4461
or 4461-A, as applicable, to the address in
section 20. The first page of the Form 4461
or 4461-A must be typed. The application
must include a copy of the plan (adoption
agreement and basic plan document) and
any separate trust or custodial account document(s). In the case of an initial submission of a basic plan document under this
revenue procedure, the M&P mass submitter’s application must also be accompanied
by applications for opinion letters filed on
behalf of the requisite number of identical adopters (as determined under section
4.08), unless the M&P mass submitter has
already satisfied this requirement in connection with a previous application under
this revenue procedure involving another
basic plan document. The Service intends
to revise Form 8717, User Fee for Employee Plan Determination Letter Request,
so that it applies to such a request. Until
the form has been revised, an M&P request
should continue to include the applicable
user fee with the submission. An M&P
mass submitter may submit an application
on its own behalf as one of the requisite
number of adopting sponsors.
(2) After satisfying the requisite number of adopting sponsors requirement, the
M&P mass submitter may submit additional applications on behalf of other sponsors that wish to adopt a word-for-word
identical plan or a plan that contains minor
modifications from the mass submitter
plan, as provided in section 12.03(2). In

683

addition, the M&P mass submitter may
then submit requests for opinion letters
under this section 12.01 for its other plans,
regardless of the number of identical
adopters of such other plans.
(3) The Service intends to send opinion
letters to M&P mass submitters and sponsors (as well as advisory letters to VS mass
submitters and practitioners) at approximately the same time within the applicable
six-year cycle. In the interim, the Service
will send an email to the applicable M&P
or VS mass submitter, sponsor, or practitioner, if the Service determines that the
plan appears to be in full compliance with
the applicable qualification requirements
based on the submissions and the completed review. Notwithstanding the above,
this email only provides assurance that the
Service believes the plan appears to meet
the applicable qualification requirements
under review as of the date of this email.
This email correspondence is for the convenience of the applicable sponsor, practitioner or mass submitter, but does not constitute an official opinion or advisory letter. Until issuance of the official opinion or
advisory letter no reliance exists. The Service reserves the right to require changes
after the email is sent, in its sole discretion.
.02 Reduced Procedural Requirements
for Sponsors That Use Mass Submitter
Plans — A sponsor of an M&P plan of
a mass submitter must obtain an opinion
letter. For initial qualification, or where
the sponsor’s plan includes modifications,
the M&P mass submitter on behalf of the
sponsor must submit to EP Rulings and
Agreements a completed Form 4461-B
which contains a declaration by the M&P
mass submitter under penalty of perjury
that the sponsor has adopted an M&P plan
that is word-for-word identical, within the
meaning of this section, to a plan of the
M&P mass submitter, or an M&P plan
that is a minor modification of the mass
submitter’s plan. The Form 4461-B must
be typed. If the sponsor is sponsoring a
word-for-word identical plan (including a
flexible plan), a copy of the plan need not
be submitted. If the M&P mass submitter
submits a plan with minor modifications,
it must comply with the requirements of
section 12.03(2). The application submitted on behalf of the sponsor must include
the required user fee. Upon receipt of the
request for an opinion letter, described
above, the Service will, as soon as cleri-

March 7, 2005

cally feasible, issue an opinion letter to the
sponsor.
.03 Definitions —
(1) Flexible Plan —
(a) In general — A “flexible plan” is a
plan submitted by an M&P mass submitter
that contains optional provisions (as defined in (b), below). Sponsors that adopt
the flexible plan may include or delete
any optional provision that is designated
as such in the M&P mass submitter’s
plan, provided the inclusion or deletion
of specific optional provisions conforms
to the M&P mass submitter’s written representation to the Service concerning the
choices available to sponsors and the coordination of optional provisions. An M&P
mass submitter must bracket and identify
the optional provisions when submitting
such plan to EP Rulings and Agreements
and must also provide the Service a written representation describing the choices
available to sponsors and the coordination of optional provisions. Thus, such
a representation must indicate whether a
sponsor’s plan may contain only one of a
certain group of optional provisions, may
contain only a specific combination of
provisions, or may exclude the provisions
entirely. Similarly, if the inclusion (or
deletion) of a specific optional provision in
a sponsor’s plan will automatically result
in the inclusion (or deletion) of any other
optional provision, this must be set forth in
the M&P mass submitter’s representation.
A flexible plan may contain only optional
provisions which meet the requirements
of (b), below, and must be drafted so that
the qualification of any sponsor’s plan
will not be affected by the inclusion or
deletion of optional provisions. For example, if a sponsor’s defined contribution
plan contains an optional provision which
allows a portion of a participant’s account
to be invested in life insurance, then under the terms of the sponsor’s plan, the
application of the proceeds must meet the
requirements of §§ 401(a)(11) and 417. A
flexible plan adopted by a sponsor which
differs from the M&P mass submitter plan
only because the sponsor has deleted certain optional provisions from its plan in
conformance with the M&P mass submitter’s representation described above will
be treated as a word-for-word identical
plan to the M&P mass submitter plan. The
Service encourages M&P mass submitters
to limit the number of optional provisions

March 7, 2005

described in (b)(i) and (ii), below, which
they provide under a flexible plan to six
investment provisions and six administrative provisions.
(b) Optional Provisions — A flexible
plan may contain only optional provisions
that comply with the requirements set forth
below. The optional provisions may be
arranged as separate optional articles or
as separate optional provisions within a
single article. A flexible plan may also
contain optional provisions in the adoption agreement. For example, if an M&P
mass submitter flexible plan basic plan
document contains an optional provision
that would allow for loans under a sponsor’s M&P plan, the adoption agreement
could also include an optional provision
that would enable an adopting employer
to elect whether loans will be available
under the plan it adopts. If the sponsor
does not wish to enable adopting employers to make loans available under their
plans, both the basic plan document optional provision and the adoption agreement optional provision would be deleted
from the sponsor’s M&P plan. Sponsors
may include or delete optional provisions
of M&P mass submitter plans, but once the
sponsor has decided to include an optional
provision, it must offer that provision to all
adopting employers. Any optional provision that the Service determines does not
meet the requirements of this section will
have to be changed to a non-optional provision or deleted from the M&P mass submitter’s plan. The following is an exclusive list of the allowable optional provisions that a flexible plan may contain:
(i) Investment Provisions — An M&P
mass submitter may offer a variety of investment provisions in its plan for sponsors to include or delete from their version
of the plan. However, the plan as adopted
by the sponsor must provide some method
for investing trust assets. Investment provisions are those provisions that describe
the plan’s methods of investing the trust or
custodial funds, including provisions such
as the availability of loans and investments
in insurance contracts or other funding media, and self-directed investments. (Also
see 4.05 and 5.09 regarding flexibility permitted in trust or custodial account documents.)
(ii) Administrative Provisions — An
M&P mass submitter may offer a variety
of administrative provisions in its plan for

684

sponsors to include or delete from their
version of the plan. However, the plan as
adopted by the sponsor must describe how
the plan will be administered. Administrative provisions are those provisions that
describe the administration of the plan,
including the powers, duties, and responsibilities of a plan’s custodian, trustee,
administrator, employer, and other fiduciaries. Administrative provisions include
the allocation of responsibilities among
fiduciaries, the resignation or replacement
of fiduciaries, claims procedures under the
plan, and record-keeping requirements.
However, procedural provisions that are
required for plan qualification are not
administrative provisions under this section. For example, provisions that provide
for the notice to participants required by
§ 417 and record-keeping required by regulations under § 401(k) and (m) are not
administrative provisions for purposes of
this revenue procedure, and may not be
optional provisions.
(iii) Cash or Deferred Arrangement —
An M&P mass submitter may include a
self-contained cash or deferred arrangement (as defined in § 401(k)) for sponsors
to include or delete.
(c) Addition of Optional Provisions by
the M&P Mass Submitter — An M&P
mass submitter may add additional optional provisions to its plan after a favorable opinion letter is issued. Generally,
the addition of such optional provisions
will not be treated as a plan amendment
for purposes of this revenue procedure,
Rev. Proc. 2005–6, and Rev. Proc.
2005–8, 2005–1 I.R.B. 243, and sponsors and adopting employers will not be
required to obtain new opinion and determination letters in order to preserve
reliance. (However, the addition of a cash
or deferred arrangement or any change to
the language of the adoption agreement
subsequent to the issuance of an opinion
letter will be treated as a plan amendment
to the M&P mass submitter’s plan and the
requirements of subsection .04 will then
apply.) The M&P mass submitter must
submit such additional optional provisions
to the Service, along with a completed
Form 4461 or 4461-A, as applicable, and
a check or money order in the amount
specified in section 6.04(6) of Rev. Proc.
2005–8. No opinion letter will be issued
to the M&P mass submitter or any adopting sponsor with respect to the addition of

2005–10 I.R.B.

these optional provisions. Instead, a letter
will be issued to the M&P mass submitter
notifying it that the addition of such optional provisions will not affect the status
of favorable opinion and determination
letters issued to sponsors and adopting
employers.
(d) Notification to Employer — If an
M&P mass submitter adds optional provisions, as described in (c), above, all adopting sponsors who wish to include the additional optional provisions must furnish
each adopting employer with a copy of the
plan that includes such additional provisions. If a sponsor decides to include or
delete an optional provision after it initially adopted the plan, it must also furnish each adopting employer with a copy
of the new plan. However, if such inclusion or deletion results in a change to the
language of the adoption agreement, such
change will be treated as a plan amendment and the sponsor and its adopting employers may not continue to rely on previously issued opinion or determination letters.
(2) Minor Modifications —
(a) A “minor modification” is a minor change to an otherwise word-for-word
identical plan of the M&P mass submitter
that does not require an in-depth technical review. For example, a change from
5 year 100% vesting to 3 year 100% vesting is a minor modification. On the other
hand, a change in the method of accrual
of benefits in a defined benefit plan would
not be considered a minor modification. A
minor modification must be submitted by
the M&P mass submitter on behalf of the
sponsor that will adopt the modified plan.
Subject to sections 12.05 and 21.03 and
the provisions of this section, submissions
with respect to minor modifications will be
reviewed on an expedited basis and opinion letters will be issued to the sponsor as
soon as possible.
(b) The Service reserves the right to determine if such changes are actually minor. If it is determined that the changes
are extensive or require an in-depth technical review, the plan submitted under section (c) below will not be entitled to expedited review and will otherwise be treated
as a non-mass submitter plan. (In the event
the plan is treated as a non-mass submitter plan, the Service will notify the M&P

2005–10 I.R.B.

mass submitter in writing of its determination. Within 30 days following the date
of such communication, either the M&P
mass submitter may revise the plan so that
the modifications are minor and resubmit
the revised plan, or the sponsor may submit Form 4461 or 4461-A, whichever is
applicable, and an additional user fee in an
amount equal to the difference between a
non-mass submitter plan application user
fee and a minor modifier application user
fee. If, after such 30 day period neither action has been taken, the application may be
considered withdrawn.)
(c) The M&P mass submitter must initially submit the first page of the applicable
Form 4461-B, as a placeholder. Such form
must be typed. When the lead plan has
been approved, the M&P mass submitter
must submit a copy of the M&P mass submitter’s plan with the modifications highlighted, as well as a statement indicating
the location and effect of each change. The
M&P mass submitter must certify under
penalty of perjury that the plan of the sponsor, except for the delineated changes, is
word-for-word identical, within the meaning of this section, to the plan for which the
M&P mass submitter received a favorable
opinion letter. If an M&P mass submitter fails to identify each modification, such
failure will be considered a material misrepresentation and an employer may not
rely on any opinion or determination letter that may be issued with respect to the
plan. If an M&P mass submitter repeatedly fails to identify such modifications,
the Service may deny permission to that
M&P mass submitter to submit additional
modifications.
.04 Amendments of M&P Mass Submitter Plans — Any plan submitted by
an M&P mass submitter must include
language designating the M&P mass submitter as agent for the sponsor for purposes
of making plan amendments (see section
12.02). Any sponsor that does not wish to
make the amendments made by an M&P
mass submitter may switch to another
M&P mass submitter or may submit an
application for an opinion letter on its own
behalf. If the M&P mass submitter makes
any change to the plan, other than the
addition of optional provisions pursuant
to section 12.03(1)(c), an amendment described in section 21.02, or a sample or

685

model amendment required by the Service,
it must comply with the requirements of
section 21.01 of this revenue procedure.
In addition, prior to submitting an amendment to EP Rulings and Agreements, the
M&P mass submitter must notify the Service of its intention to amend the plan.
Such notification should be submitted, in
writing, to the address in section 20. The
Service will then mail a list to the M&P
mass submitter showing all sponsors that
have adopted plans that are identical to the
M&P mass submitter’s plans, as well as
the specific plans adopted by each sponsor. The M&P mass submitter must then
submit the amended plan to EP Rulings
and Agreements for approval (regardless
of whether it is an off-cycle or on-cycle
filing under section 21.03), along with
a list identifying all adopting sponsors’
plans that will be amended, a user fee
form for each such sponsor, and the appropriate user fee required under section 6.04
of Rev. Proc. 2005–8. All sponsors that
have adopted the M&P mass submitter’s
plan, are identified on the list submitted to
the Service, and for which a user fee has
been submitted, will be considered to have
made such amendments and will be issued
opinion letters. In the case of modified
plans, separate Form 4461 applications
must be filed along with copies of the
plans as amended, user fee forms, and the
user fee required by section 6.04 of Rev.
Proc. 2005–8. Copies of the amended
plan must be sent to adopting employers.
Any adopting sponsor that is not included
on the list submitted to the Service (or in
the case of a minor modifier, for which
a Form 4461-B application has not been
filed) or which notifies the Service of its
desire not to adopt such amendment will
no longer participate as an M&P mass submitter plan but must apply for an opinion
letter on its own behalf to retain its status
as an M&P plan.
.05 Expeditious Processing Accorded
M&P Mass Submitter Plans — Subject
to section 21.03, all M&P mass submitter
plans, including the adoption of approved
M&P mass submitter plans by sponsors,
will be accorded more expeditious processing than M&P plans submitted by nonmass submitters, to the extent administratively feasible.

March 7, 2005

PART II — VOLUME
SUBMITTER PLANS
SECTION 13. DEFINITIONS
.01 Volume Submitter Plan — A “volume submitter plan” or “VS plan” refers to
either a specimen plan of a VS practitioner
or a plan of a client of the VS practitioner
that is substantially similar to the VS practitioner’s approved specimen plan.
.02 Specimen Plan — A “specimen
plan” is a sample plan of a VS practitioner (rather than the actual plan of an
employer). A specimen plan may include
an adoption agreement.
.03 Advisory Letter — An “advisory
letter” is a written statement issued by the
Service to a VS practitioner or VS mass
submitter as to the acceptability of the
form of a specimen plan and any related
trust or custodial account under § 401(a)
or § 403(a).
.04 VS Practitioner — A “VS practitioner” is any person that (1) has an
established place of business in the United
States where it is accessible during every
business day and (2) represents to the Service that it has at least 30 employer-clients
each of which is reasonably expected to
timely adopt a plan that is substantially
similar to the VS practitioner’s specimen plan. Notwithstanding the above,
the required number of employer-clients
reasonably expected to timely adopt a substantially similar money purchase pension
specimen plan is reduced to 10 in the case
of a VS practitioner that has specimen
plans for two or more separate categories
described in section 17.03, one of which
is a money purchase pension plan. For
example, if a VS practitioner has a money
purchase pension specimen plan and no
other types of plans, or if a VS practitioner has plans described in two or more
categories, none of which is a money purchase pension plan, the employer-client
requirement remains at 30. The deadline
for timely adoption will be announced by
the Service in future guidance.
A VS practitioner may submit any number
of specimen plans for advisory letters provided the 30 employer requirement (or 10,
if applicable) is separately satisfied with
respect to each specimen plan. The Service reserves the right at any time to request from the VS practitioner a list of

March 7, 2005

the employers that have adopted or are expected to adopt the VS practitioner’s specimen plans, including the employers’ business addresses and employer identification
numbers.
Notwithstanding the above, any person
that has an established place of business
in the United States where it is accessible
during every business day may sponsor a
specimen plan as a word-for-word identical adopter of a specimen plan of an VS
mass submitter, regardless of the number
of employers that are expected to adopt
the plan.
A VS practitioner is also a practitioner that
has either (a) 30 or more adopting employers in each of 30 or more states (treating,
for this purpose, the District of Columbia as a state) or (b) 3000 or more adopting employers. The determination as to
whether there are 3000 or more adopting
employers or 30 or more adopting employers in each of 30 or more states may be
made on any one date during the 12 month
period ending on the date that is 60 days
after the effective date of this revenue procedure. For this purpose, an adopting employer is any employer that has adopted
any plan of the sponsor that has a GUST
opinion letter.
By submitting an application for an advisory letter for a specimen plan under this
revenue procedure (or by having an application filed on its behalf by a VS mass
submitter), a person represents to the Service that it is a VS practitioner, as defined above. If the VS practitioner’s specimen plan permits the VS practitioner to
amend the VS plan on behalf of adopting employers, as permitted by section 15,
the VS practitioner also agrees to comply
with any requirements imposed on sponsors of M&P plans by this procedure. Failure to comply with these requirements may
result in the loss of eligibility to sponsor
specimen plans and the revocation of advisory letters that have been issued to the
VS practitioner.
.05 VS Mass Submitter — A “VS mass
submitter” is any person that (1) has an established place of business in the United
States where it is accessible during every
business day and (2) submits advisory letter applications on behalf of at least 30
unaffiliated practitioners each of which is

686

sponsoring, on a word-for-word identical
basis, the same specimen plan. A VS mass
submitter may submit an advisory letter
application on its own behalf as one of
the 30 unaffiliated practitioners. For purposes of this definition, affiliation is determined under § 414(b) and (c). Additionally, the following will be considered to be
affiliated: any law, accounting, consulting
firm, etc., with its partners, members, associates, etc. A VS mass submitter will be
treated as a VS mass submitter with respect
to each specimen plan for which the 30 unaffiliated practitioner requirement is separately met.
SECTION 14. PROVISIONS
REQUIRED IN EVERY VS PLAN
.01 Anti-Cutback Provisions — VS
plans must specifically provide for the
protection provided under § 411(a)(10)
and (d)(6), to the extent required, in the
event that the employer amends the plan
in any manner. If a VS plan authorizes
the VS practitioner to amend the plan on
behalf of employers, the VS practitioner
may not amend the plan in a manner that
could result in the elimination of a benefit
to the extent the benefit is required to be
protected under § 411(d)(6) with respect to
the plan of any adopting employer, unless
permitted to do so under §§ 1.401(a)–4
and 1.411(d)–4. In addition, a VS plan
that is not exempt from the top-heavy
requirements and that does not contain
vesting for all years which is at least as
favorable to participants as that provided
in § 416(b), must specifically provide that
any vesting that occurs while the plan is
top-heavy will not be cut back if the plan
ceases to be top-heavy.
.02 Definition of Employee / § 414(b),
(c), (m), (n) and (o) — Each VS plan must
include a definition of employee as any
employee of the employer maintaining the
plan or any other employer aggregated under § 414(b), (c), (m) or (o) and the regulations thereunder. The definition of employee shall also include any individual
deemed under § 414(n) (or under regulations under § 414(o)) to be an employee
of any employer described in the previous
sentence.
.03 Definition of Service / § 414(b), (c),
(m), (n), and (o) — Each VS plan must
specifically credit all service with any employer aggregated under § 414(b), (c), (m)

2005–10 I.R.B.

or (o) and the regulations thereunder as
service with the employer maintaining the
plan. In addition, in the case of an individual deemed under § 414(n) (or under regulations under § 414(o)) to be the employee
of any employer described in the previous
sentence, service with such employer must
be credited to such individual.
.04 Adopting Employer Modification
of Trust or Custodial Account Document
— An employer will not be considered to
have an individually designed plan merely
because the employer amends administrative provisions of the trust or custodial
account document (such as provisions
relating to investments and the duties of
trustees), provided the amended provisions are not in conflict with any other
provision of the plan and do not cause
the plan to fail to qualify under § 401(a).
For this purpose, an amendment includes
modification of the language of the trust
or custodial account document and the
addition of overriding language.
.05 Other Required Provisions — Requirements similar to those under sections
5.11 and 5.12 relating to M&P plans apply
with respect to VS plans, except as otherwise provided in this revenue procedure.
SECTION 15. APPROVED PLANS
— MAINTENANCE OF APPROVED
STATUS
.01 Cumulative List in Six-Year Cycle
— Future guidance described in section
3.05 of this revenue procedure will provide that practitioners of pre-approved VS
plans must submit requests for advisory
letters by a specified time period within a
six-year cycle in order to continue to rely
on their advisory letters. Practitioners may
apply for advisory letters at other times,
but these filings will be “off-cycle” filings,
as described in section 21.03. The Service
will review the plans that have been submitted by the specified time period within
a six-year cycle taking into account the
applicable Cumulative List that identifies
changes in the qualification requirements
of the Code as well as items of published
guidance relating to the plan qualification
requirements, such as regulations and revenue rulings. However, in order to be qualified, a plan must comply with all relevant
qualification requirements, not just those
on the applicable Cumulative List. The letter will not take into account, and a prac-

2005–10 I.R.B.

titioner may not rely on advisory letters
with respect to, statutory changes enacted,
and/or any guidance issued, after the issuance of the applicable Cumulative List,
unless those changes and/or guidance are
listed on the applicable Cumulative List.
.02 Subsequent Required Amendments
— Except as otherwise provided in future
guidance, in the event of changes in qualification requirements resulting from future
guidance, or other regulatory or statutory
changes that were not taken into account
in issuing the advisory letter, an approved
VS plan must be amended by the practitioner and, if necessary, the employer,
to retain its approved status if any provisions therein fail to meet the requirements
of law, regulations, or other issuances and
guidelines affecting qualification. Failure
to so amend could result in the loss of
a plan’s qualified status. However, this
does not change the applicable period during the six-year cycle when practitioners
must request advisory letters, which will
still occur only once every six years. Practitioners are required to make reasonable
and diligent efforts to ensure that each employer which, to the best of the practitioner’s knowledge, continues to maintain
the plan as a VS plan, amends its plan when
necessary.
Even if future guidance provides that
the plan need not be amended during a
six-year cycle to reflect a change in the
qualification requirements, the plan must
operationally comply with any changes in
qualification requirements and the terms of
the plan as ultimately amended to reflect
the change. Failure to comply with this or
any other requirement imposed on practitioners by this revenue procedure may result in the loss of eligibility to sponsor VS
plans and the revocation of advisory letters
that have been issued to the practitioner.
.03 Amendments Following Revenue
Rulings — If an approved VS plan is required to be amended to retain its approved
status as a result of publication by the Service of a revenue ruling, notice or similar statement in the Internal Revenue Bulletin (I.R.B.), with changes that were not
taken into account in issuing the advisory
letter then, unless specifically stated otherwise in the revenue ruling, etc., the time
by which the practitioner must amend its
VS plan to conform to the requirements of
the revenue ruling, etc., shall be the end of
the one-year period after its publication in

687

the I.R.B., and with respect to any adopting
employer’s plan the effective date of such
amendment shall be the first day of the first
plan year beginning within such one-year
period. As noted in section 15.02, this does
not change the applicable period during the
six-year cycle when practitioners must request advisory letters, which will still only
occur once every six years. Further, practitioners must make reasonable and diligent efforts to ensure that each employer
amends its plan when necessary as noted
in section 15.02.
.04 Adopting Employers — The Service will announce when adopting employers must adopt amendments to comply
with new guidance issued by the Service.
Regardless of when amendments are required to be made, adopting employers
must operationally comply as of the applicable effective date of the new guidance.
.05 Option to Permit Practitioner
Amendment — A VS practitioner may
amend its specimen plan and request a
new advisory letter with respect to the
amended plan. Ordinarily, the amendments will apply only to the plans of
employers who adopt the plan after it has
been amended and will not apply to plans
of employers who adopted the plan prior
to the amendment. However, a VS plan
may, but is not required to, include a provision that authorizes the VS practitioner
to amend the plan on behalf of employers
who have previously adopted the plan, so
that changes in the Code, regulations, revenue rulings, other statements published
by the Internal Revenue Service (including
model, sample or other required good faith
amendments that specifically provide that
their adoption will not cause such plan to
be individually designed), or corrections
of prior approved plans may be applied to
all employers who have adopted the plan.
The provision must state that the practitioner will no longer have the authority to
amend the plan on behalf of the adopting
employer as of the date the Service requires the employer to file Form 5300 as
an individually designed plan as a result
of an employer amendment to the plan to
incorporate a type of plan not allowable
in the VS program (e.g., the addition of
an ESOP) or as a result of amendments
described in section 24.03. The provision
must also state that if the employer is
required to obtain a determination letter
in order to have reliance (for example,

March 7, 2005

because the employer has modified the
specimen plan), the practitioner’s authority to amend the plan on behalf of the
adopting employer is conditioned on the
plan being covered by a favorable determination letter.
.06 Responsibilities of Practitioner
— A VS practitioner who is authorized
to adopt plan amendments on behalf of
adopting employers must comply with the
requirements in this section 15 as well as
sections 7.06 and 9 through 11 that apply
to M&P sponsors. Failure to do so may
result in the loss of eligibility to sponsor
VS plans and the revocation of advisory
letters that have been issued to the VS
practitioner. Thus, the VS practitioner
must maintain, or have maintained on its
behalf, a record of the employers that have
adopted the plan, and the VS practitioner
must make reasonable and diligent efforts
to ensure that adopting employers have
actually received and are aware of all
plan amendments and that such employers
adopt new documents when necessary.
.07 Loss of Qualified Status — If a
practitioner reasonably concludes that
an employer’s VS plan may no longer
be a qualified plan and the practitioner
does not or cannot submit a request to
correct the qualification failure under the
Employee Plans Compliance Resolution
System (EPCRS), it is incumbent on the
practitioner to notify the employer that the
plan may no longer be qualified, advise the
employer that adverse tax consequences
may result from loss of the plan’s qualified status, and inform the employer about
the availability of EPCRS. See Rev. Proc.
2003–44.
SECTION 16. ADVISORY LETTERS
— SCOPE
.01 General Limits on Advisory Letters — Advisory letters will be issued only
to VS practitioners or VS mass submitters. Advisory letters constitute determinations as to the qualification of the plans
as adopted by particular employers only
under the circumstances, and to the extent,
described in section 19. Advisory letters
do not constitute rulings or determinations
as to the exempt status of related trusts or
custodial accounts.
.02 Areas Not Covered by Advisory
Letters — Advisory letters will not be issued for:

March 7, 2005

(1) Multiemployer plans;
(2) Union plans (This does not preclude
a VS plan from covering employees of the
employer who are included in a unit covered by a collective bargaining agreement
or the adoption of a VS plan pursuant to
such agreement as a single employer plan
which covers only employees of the employer.);
(3) Stock bonus plans;
(4) Employee stock ownership plans;
(5) Pooled fund arrangements contemplated by Rev. Rul. 81–100 (as modified
by Rev. Rul. 2004–67)
(6) Annuity contracts under § 403(b);
(7) All cash balance plans and any
other defined benefit plans (regardless of
whether they are cash balance plans) under which the test for nondiscrimination
under § 401(a)(4) is made by reference to
contributions rather than benefits;
(8) Plans described in § 414(k) (relating
to a defined benefit plan which provides
a benefit derived from employer contributions which is based partly on the balance
of the separate account of a participant);
(9) Target benefit plans, other than
plans which, by their terms, satisfy each of
the safe harbor requirements described in
§ 1.401(a)(4)–8(b)(3)(i), as well as the additional rules in § 1.401(a)(4)–8(b)(3)(ii)
through (vii);
(10) Church plans described in § 414(e)
that have not made the election provided
by § 410(d);
(11) Governmental plans that include
so-called “DROP” provisions or similar
provisions;
(12) Plans under which the § 415 limitations are incorporated by reference;
(13) Plans that incorporate the ADP test
under § 401(k)(3) or the ACP test under
§ 401(m)(2) by reference;
(14) Section 401(k) plans that provide
for hardship distributions under circumstances other than those described in the
safe harbor standards in the regulations under § 401(k), unless these distributions are
subject to nondiscriminatory and objective
criteria contained in the plan;
(15) Fully-insured § 412(i) plans, other
than plans that, by their terms, satisfy
the safe harbor for § 412(i) plans in
§ 1.401(a)(4)–3(b)(5);
(16) Plans that fail to contain a provision reflecting the requirements of
§ 414(u) (see Rev. Proc. 96–49);

688

(17) Plans that include so-called failsafe provisions for § 401(a)(4) or the average benefit test under § 410(b);
(18) Plans that include blanks or fill-in
provisions for the employer to complete
unless the provisions have parameters that
preclude the employer from completing
the provisions in a manner that could violate the qualification requirements.
(19) Plans designed to satisfy the provisions of § 105.
The Service may, in its discretion, decline
to issue advisory letters for other types of
plans not described in this section 16.02.
SECTION 17. ADVISORY
LETTERS — INSTRUCTIONS TO
VS PRACTITIONERS
.01 Employee Plans Rulings and Agreements Issues Advisory Letters — Employee Plans Rulings and Agreements
will, upon the request of a VS practitioner,
issue an advisory letter as to the acceptability of the form of the VS practitioner’s
specimen plan under § 401(a) or § 403(a).
.02 Procedure for Requesting Advisory
Letters — A request for an advisory letter relating to a specimen plan must be
submitted in accordance with the procedures described in this section. Forms
4461, 4461–A, and 4461–B, currently applicable to M&P plans, are being revised
to incorporate VS submissions. The Service expects to announce revised procedures for requesting advisory letters that
include submission on these forms in the
near future. When Forms 4461, 4461–A
and 4461–B are published, the following
requirements will be incorporated into the
instructions to the forms. Until then, VS
submissions should include:
(1) a cover letter requesting approval
of VS submissions, indicating the type of
plan for which approval is requested. The
request must include a certification that the
VS practitioner meets the requirements, including that it has at least 30 employerclients (or 10, if applicable) each of which
is reasonably expected to timely adopt a
plan that is substantially similar to the VS
practitioner’s specimen plan, as described
in section 13.04.
(2) a copy of the specimen plan, including adoption agreement, if applicable, and
any related specimen trust instrument;

2005–10 I.R.B.

(3) the required user fee submitted with
Form 8717, User Fee for Employee Plan
Determination Letter Request; and
(4) an index/table of contents listing the
location of all variable sections.
See section 20 for the address to file the
application.
.03 Separate Specimen Plans and Applications Required for Different Categories of Plans — A separate specimen
plan and application is required for the following categories of plans: a profit-sharing plan (with or without a § 401(k)
arrangement), a money purchase pension
plan (other than a target benefit plan), a
target benefit plan, and a defined benefit plan. Different categories may not be
combined in a single specimen plan or
application.
.04 Sample Language — A Listing of
Required Modifications (LRM) containing sample plan language is available from
Employee Plans Rulings and Agreements.
Although the sample language is designed
for use in M&P plans, which use an adoption agreement format, VS practitioners
should refer to the sample language as a
guide in drafting VS plans. To expedite
the review of their plans, VS practitioners are encouraged to use LRM language
where appropriate and to identify where
such language is being used in their plan
documents. LRMs may be downloaded
from the Internet at the following address:
http://www.irs.gov.
.05 Timing of Issuance of Advisory Letters — The Service intends to issue advisory letters to practitioners and VS mass
submitters (as well as opinion letters to
M&P mass submitters and sponsors) at approximately the same time within the applicable 6-year cycle. In the interim, the
Service will send an email to the applicable M&P or VS mass submitter, sponsor,
or practitioner if the Service determines
that the plan appears to be in full compliance with the applicable qualification requirements, based on the submissions and
the completed review. Notwithstanding
the above, this email only provides assurance that the Service believes the plan appears to meet the applicable qualification
requirements under review as of the date
of the email. This email correspondence is
for the convenience of the applicable sponsor, practitioner or mass submitter but does

2005–10 I.R.B.

not constitute an official opinion or advisory letter. Until issuance of the official
opinion or advisory letter no reliance exists. The Service reserves the right to require changes after the email is sent, in its
sole discretion.
SECTION 18. VS MASS SUBMITTERS
.01 Advisory Letters Issued to VS Mass
Submitters — EP Rulings and Agreements
will, upon request by an VS mass submitter, as defined in section 13.05, issue an advisory letter as to the acceptability of the
form of the VS mass submitter’s specimen
plan under § 401(a) or § 403(a). See section 20 for the address to file the application. The provisions of section 17.05 on
the timing of the issuance of advisory letters and an interim email notification by
the Service also apply to this section.
.02 As noted in section 17.02, Forms
4461, 4461-A and 4461-B are being revised. Until these revisions are completed,
the requirements for the VS mass submitter’s application are as follows:
(1) The application must include the
plan and trust and all the other information
required by section 17. The application
must include a cover letter that states that
at least 30 VS practitioners are submitting
applications for advisory letters for identical specimen plans and must certify that
each such plan is word-for-word identical
to the VS mass submitter specimen plan.
The cover letter must provide the name,
address, and EIN of each of the VS practitioners.
(2) The application for the VS mass
submitter specimen plan must include
the required user fee under Rev. Proc.
2005–8.
(3) The application must be accompanied by separate advisory letter applications filed by each of the VS practitioners
listed in the cover letter.
(4) The required user fee for an identical adopter application under Rev. Proc.
2005–8 must also be submitted.
(5) After the initial submission of advisory letter applications for at least 30 VS
practitioners, applications may be filed by
other VS practitioners who will sponsor
the word-for-word identical plan. A copy
of the plan should not be submitted.

689

PART III — ALL
PRE-APPROVED PLANS
SECTION 19. EMPLOYER RELIANCE
.01 Standardized M&P Plans — An
employer adopting a standardized M&P
plan may rely on that plan’s opinion letter, except as provided in (1) through (3)
and section 19.03 below, if the sponsor of
such plan or plans has a currently valid
favorable opinion letter, the employer has
followed the terms of the plan(s), and the
coverage and contributions or benefits
under the plan(s) are not more favorable
for highly compensated employees (as
defined in § 414(q)) than for other employees.
(1) An employer may not rely on an
opinion letter for a standardized plan with
respect to the requirements of §§ 415 and
416, without obtaining a determination letter, if the employer maintains at any time,
or has maintained at any time, another
plan, including a standardized plan, that
was qualified or determined to be qualified covering some of the same participants. For this purpose, a plan that has
been properly replaced by the adoption of
a standardized plan is not considered another plan. The plan that has been replaced and the standardized plan must be
of the same type (e.g., both defined benefit plans) in order for the employer to be
able to rely on the standardized plan with
respect to the requirements of §§ 415 and
416 without obtaining a determination letter. In addition, an employer that adopts
a standardized defined contribution plan
will not be considered to have maintained
another plan merely because the employer
has maintained another defined contribution plan(s), provided such other plan(s)
has been terminated prior to the effective
date of the standardized plan and no annual additions have been credited to the account of any participant under such other
plan(s) as of any date within a limitation
year of the standardized plan. Likewise,
an employer that adopts a standardized defined contribution plan that is first effective on or after the effective date of the repeal of § 415(e) will not be considered to
have maintained another plan merely because the employer has maintained a defined benefit plan(s), provided the defined
benefit plan(s) has been terminated prior to

March 7, 2005

the effective date of the standardized defined contribution plan.
(2) An employer that has adopted a
standardized defined benefit plan may rely
on an opinion letter with respect to the requirements of § 401(a)(26) only if the plan
satisfies the requirements of § 401(a)(26)
with respect to its prior benefit structure
or is deemed to satisfy § 401(a)(26) under
the regulations. However, an employer
may request a determination letter if the
employer wishes to have reliance as to
whether the plan satisfies § 401(a)(26)
with respect to its prior benefit structure.
(3) An employer that adopts a standardized plan may not rely on an opinion letter
with respect to: (a) whether the timing of
any amendment to the plan (or series of
amendments) satisfies the nondiscrimination requirements of § 1.401(a)(4)–5(a),
except with respect to plan amendments
granting past service that meet the safe
harbor described in § 1.401(a)(4)–5(a)(3)
and are not part of a pattern of amendments that significantly discriminates in
favor of highly compensated employees; or (b) whether the plan satisfies
the effective availability requirement of
§ 1.401(a)(4)–4(c) with respect to any benefit, right, or feature. An employer that
adopts a standardized plan as an amendment to a plan other than a standardized
plan may not rely on an opinion letter
with respect to whether a benefit, right, or
feature that is prospectively eliminated satisfies the current availability requirements
of § 1.401(a)(4)–4 of the regulations. Such
an employer may request a determination
letter if the employer wishes to have reliance as to whether the prospectively
eliminated benefit, right, or feature satisfies the current availability requirements.
.02 Nonstandardized M&P Plans and
Volume Submitter Plans — An employer
adopting a nonstandardized M&P or volume submitter plan may rely on that plan’s
opinion or advisory letter as described below if the employer’s plan is identical to
an approved M&P or specimen plan with a
currently valid favorable opinion or advisory letter, the employer has chosen only
options permitted under the terms of the
approved plan, and the employer has followed the terms of the plan. Also see section 19.03(3) below. These employers can
forego filing Form 5307 and rely on the
plan’s favorable opinion or advisory letter
with respect to the qualification require-

March 7, 2005

ments, except as provided in section (1)
through (4) and section 19.03 below.
(1) Except as provided in section
19.03(2), (3) and (4), adopting employers
of nonstandardized M&P plans and volume submitter plans may not rely on a
favorable opinion or advisory letter with
respect to the requirements of:
(a) §§ 401(a)(4), 401(a)(26), 401(l),
410(b) or 414(s); or
(b) if the employer maintains or has
ever maintained another plan covering
some of the same participants, §§ 415 or
416.
For this purpose, whether an employer
maintains or has ever maintained another
plan will be determined using principles
consistent with section 19.01 above.
(2) Adopting employers of nonstandardized M&P plans and volume submitter
plans may rely on the opinion or advisory
letter with respect to the requirements of
§§ 410(b) and 401(a)(26) (other than the
§ 401(a)(26) requirements that apply to a
prior benefit structure) if 100 percent of all
nonexcludable employees benefit under
the plan.
(3) Nonstandardized M&P plans must
give adopting employers the option to
elect a safe harbor allocation or benefit
formula and a safe harbor compensation
definition. Adopting employers of nonstandardized M&P plans that elect a safe
harbor allocation or benefit formula and a
safe harbor compensation definition may
rely on an opinion letter with respect to the
nondiscriminatory amounts requirement
under § 401(a)(4). Adopting employers
of nonstandardized M&P plans that are
§ 401(k) and/or § 401(m) plans may rely
on an opinion letter with respect to whether
the form of the plan satisfies the actual deferral percentage test of § 401(k)(3) or
the actual contribution percentage test
of § 401(m)(2) if the employer elects to
use a safe harbor definition of compensation in the test. Adopting employers
of nonstandardized M&P plans described
in § 401(k)(11) and/or § 401(m)(12) may
rely on an opinion letter with respect to
whether the form of the plan satisfies these
requirements unless the plan provides for
the safe harbor contribution to be made
under another plan.
(4) A VS plan may give an adopting employer the ability to select an
allocation formula for the employer

690

non-elective contribution which satisfies
one of the design-based safe harbors in
§ 1.401(a)(4)–2(b)(2) or a benefit formula
which satisfies one of the design-based
safe harbors under § 1.401(a)(4)–3(b)(3),
(4), or (5), and the ability to select a safe
harbor compensation definition for such
formula which satisfies § 1.414(s)–1(c).
If the adopting employer selects (utilizes)
such formula and compensation definition, then the adopting employer may rely
on an advisory letter with respect to the
nondiscriminatory amounts requirement
under § 401(a)(4).
.03 Other Limitations and Conditions
on Reliance — The following conditions
and limitations apply with respect to both
M&P and VS plans:
(1) An adopting employer can rely on
a favorable opinion or advisory letter for
a plan that amends or restates a plan of
the employer only if the plan that is being
amended or restated was qualified.
(2) An adopting employer has no reliance if the employer’s adoption of the
plan precedes the issuance of an opinion
or advisory letter for the plan.
(3) An adopting employer can rely on
an opinion or advisory letter only if the requirements of this section 19 are met, and
the employer’s plan is identical to an approved M&P or specimen plan with a currently valid favorable opinion or advisory
letter; that is, the employer has not added
any terms to the approved M&P or VS plan
and has not modified or deleted any terms
of the plan other than choosing options permitted under the plan or, in the case of an
M&P plan, amended the document as permitted under section 5.06 or 5.09 or, in
the case of a VS plan, modified the document as permitted under sections 14 and
15. Thus, for example, in the case of a VS
plan, the employer’s plan must be identical to the approved specimen plan except
as the result of the employer’s selection
among options that are permitted under the
terms of the approved specimen plan and
modifications permitted under sections 14
and 15.
(4) An employer’s plan will not fail to
be identical to an approved M&P or specimen plan merely because the employer
modifies or amends the plan to:
(a) Add or change a provision and/or
to specify or change the effective date
of a provision, provided the employer is
permitted to make the modification or

2005–10 I.R.B.

amendment under the terms of the approved M&P or specimen plan as well
as under § 401(a), and, except for the effective date, the provision is identical to
a provision in the approved plan. Thus,
an employer is not required to restate its
M&P or volume submitter plan in order to
change options under the plan or to specify
different effective dates. Also see section
5.02, which limits an employer’s ability
to amend an M&P plan without causing
the plan to be treated as an individually
designed plan, and section 5.11, which
requires the employer to complete a new
signature page when the employer changes
options in an M&P adoption agreement.
(b) Correct obvious and unambiguous
typographical errors and/or cross-references that merely correct a reference but
that do not in any way change the original
intended meaning of the provisions. No
such changes may affect any qualification
requirements of the plan. The Service in
its discretion may determine that any such
changes are not considered identical.
(c) Adopt model, sample or other required good faith amendments that specifically provide that their adoption by an
adopter of a VS and or M&P plan will not
cause the plan to be treated as an individually designed plan or cause the plan to fail
to be “identical” to the approved M&P or
specimen plan within the meaning of this
section.
(5) An adopting employer cannot rely
on an opinion or advisory letter if the
adopting employer has modified the terms
of the plan’s approved trust in a manner
that would cause the plan to fail to be
qualified.
.04 Reliance Equivalent to Determination Letter — If an employer can rely on
a favorable opinion or advisory letter pursuant to this section, the opinion or advisory letter shall be equivalent to a favorable determination letter. For example, the favorable opinion or advisory letter shall be treated as a favorable determination letter for purposes of section 21 of
Rev. Proc. 2005–6, regarding the effect of
a determination letter, and section 5.01(4)
of Rev. Proc. 2003–44, regarding the definition of “favorable letter” for purposes
of the Employee Plans Compliance Resolution System. Of course, the extent of
the employer’s reliance may be limited, as
provided above.

2005–10 I.R.B.

SECTION 20. WHERE TO FILE AND
OTHER RULES FOR APPLICATIONS
AND LETTERS
.01 Opinion Letters — Applications
for opinion letters, including applications
filed by M&P mass submitters, should be
sent to the attention of:
Internal Revenue Service
P.O. Box 2508
Cincinnati, OH 45201
Attn: M&P Coordinator
Room 5106
.02 Advisory Letters — Applications
for advisory letters, including applications
filed by VS mass submitters, should be
sent to:
Internal Revenue Service
P.O. Box 2508
Cincinnati, OH 45201
Attn: VSC Coordinator
Room 5106
.03 In both .01 and .02 above, a request
shipped by Express Mail or a delivery service should be sent to the attention of the
VSC Coordinator or the M&P Coordinator, whichever is applicable, to:
Internal Revenue Service
550 Main Street
P.O. Box 2508
Cincinnati, OH 45202
Room 5106
.04 Effect of Failure to Disclose Material Fact or to Accurately Provide Information — The Service may determine, based
on the application, the extent of review of
the pre-approved plan. A failure to disclose a material fact or misrepresentation
of a material fact in the application may adversely affect the reliance that would otherwise be obtained through issuance by the
Service of a favorable opinion or advisory
letter. Similarly, failure to accurately provide any of the information called for on
any form required by this revenue procedure may result in no reliance.
.05 Additional Information May Be Requested — The Service may, at its discretion, require any additional information that it deems necessary, including a
demonstration of how the variables (options or alternatives) in the M&P or specimen plan interrelate to satisfy the qualifi-

691

cation requirements of the Code. If a letter, requesting changes to plan documents,
is sent to the sponsor or VS practitioner or
an authorized representative, the changes
must be received no later than 30 days
from the date of the letter, and the response
must include either a copy of the plan with
the changes highlighted or, if the changes
are not extensive, replacement pages. If
the changes are not received within 30
days, the application may be considered
withdrawn. An extension of the 30-day
time limit will only be granted for good
cause.
.06 Inadequate Submissions — The
Service will return, without further action,
plans that are not in substantial compliance with the qualification requirements
or plans that are so deficient that they cannot be reviewed in a reasonable amount
of time. A plan may be considered not
to be in substantial compliance if, for
example, it omits or merely incorporates
qualification requirements by reference to
the applicable Code section. The Service
will not consider these plans until after
they are revised, and they will be treated
as new requests as of the date they are
resubmitted. No additional user fee will
be charged if an inadequate submission is
amended to be in substantial compliance
and is resubmitted to the Service within 30
days following the date the sponsor or VS
practitioner is notified of such inadequacy.
.07 Nonidentification of Questionable
Issues May Cause Delay — If the plan document submitted as part of an opinion or
advisory letter request contains a provision
that gives rise to an issue for which contrary published authorities exist, failure to
disclose and address significant contrary
authorities may result in requests for additional information, which will delay action
on the request.
.08 DOL Participant Loan Regulations
not Addressed by Opinion or Advisory
Letter — Pre-approved plans may adopt
procedures to comply with the Department
of Labor’s (DOL) participant loan regulations under § 408(b)(1) of ERISA in the
plan or in a separate document. The adoption of procedures outside of the plan document that are intended to comply with
these regulations will not cause a pre-approved plan to be considered an individually designed plan. The Service will not
review loan program procedures (whether
in the plan or in a separate written docu-

March 7, 2005

ment) to determine whether they comply
with the requirements of the DOL regulations. Also, any opinion or advisory letter issued for a pre-approved plan will not
consider whether loan program procedures
may, in the operation of the plan, have an
adverse effect on the qualified status of the
plan. However, the loan program procedures under the plan may not be inconsistent with the qualification requirements of
§ 401(a) of the Code.
.09 Nontransferability of Opinion and
Advisory Letters — An opinion or advisory letter issued to a sponsor or VS practitioner is not transferable to any other entity. For this purpose, a change of employer identification number is deemed to
be a change of entity.
SECTION 21. AMENDMENTS
.01 Opinion or Advisory Letters for
Sponsor or VS Practitioner Amendments
— A sponsor or VS practitioner may
amend or restate its previously approved
plan and the Service will entertain a request for an opinion or advisory letter as to
the acceptability, for purposes of § 401(a)
or § 403(a), of the form of the plan as
amended, during the specified time period within the six-year cycle, as provided
in section 8.01 and section 15.01. If the
sponsor or VS practitioner is amending
its plan, it must, except as provided in
section 12 or section 18, submit an application under the procedures in section 7
or section 17, together with a copy of the
amendment(s), a cover letter summarizing
the changes to the plan that are effected
by such amendment(s), and a copy of the
plan which is being amended. If the sponsor or practitioner is restating its plan, it
must, except as provided in section 12 or
section 18, submit the restated plan along
with the application. No more than four
consecutive amendments may be submitted without restating the plan. In addition,
the Service may, at its discretion, require
plan restatement at any time that it deems
necessary to adequately review a plan.
.02 No Opinion or Advisory Letters for
Certain Amendments — A pre-approved
plan will not lose its qualified status and,
except as provided in (4) below, no opinion
or advisory letter will be issued merely because amendments are made which solely
cover the following:

March 7, 2005

(1) Amendments to conform a plan to
the requirements of § 402(a) of Title I of
the Employee Retirement Income Security
Act of 1974 (ERISA), Pub. L. 93–406,
1974–3 C.B. 1, relating to named fiduciaries.
(2) Amendments to conform a plan to
the requirements of § 503 of ERISA, relating to claims procedures.
(3) Amendments that merely adjust
the limitations under §§ 415, 402(g),
401(a)(17), and 414(q)(1)(B) of the Code
to reflect annual cost-of-living increases,
other than amendments that add an automatic cost-of-living adjustment provisions
to the plan.
(4) Amendments that merely reflect a
change of a sponsor’s or VS practitioner’s
name. However, the sponsor or VS practitioner must notify the Service, in writing,
of the change in name and certify that it
still meets the conditions for sponsorship
described in section 4.07 or 13.04. No
opinion or advisory letter will be issued
and no user fee will be required for a mere
change in name. However, if the sponsor or VS practitioner wants a new opinion or advisory letter, it will have to submit a new application and pay the appropriate user fee. (Also see section 20 regarding changes in employer identification
numbers.) .
.03 Off-Cycle Filing — If a pre-approved plan requests an opinion or advisory letter that is not submitted during the
specified period within the six-year cycle,
the application will not be reviewed until all on-cycle plans (including applications for determination letters for individually designed plans within their staggered
5-year cycle) have been reviewed and processed. However, the Service may, in
its discretion, determine whether the processing of off-cycle filings may be prioritized and accelerated under certain circumstances.
SECTION 22. REVOCATION
Revocation of Opinion or Advisory
Letter by the Service — An opinion or
advisory letter found to be in error or not
in accord with the current views of the
Service may be revoked. However, except
in rare or unusual circumstances, such revocation will not be applied retroactively
if the conditions set forth in section 13 and
14 of Rev. Proc. 2005–4, 2005–1 I.R.B.

692

128, are met. For this purpose, opinion
and advisory letters will be given the same
effect as rulings. Revocation may be effected by a notice to the sponsor or VS
practitioner to which the letter was originally issued, or by a regulation, revenue
ruling or other statement published in the
Internal Revenue Bulletin. The sponsor
or VS practitioner should then notify each
adopting employer of the revocation as
soon as possible. The content of the notification to each adopting employer must
explain how the revocation affects any
reliance an adopting employer has on the
applicable advisory or opinion letter and
on any determination letter issued.
SECTION 23. EGTRRA
This revenue procedure announces the
opening of the pre-approved plan programs. The Service will begin accepting
applications for opinion and advisory letters for defined contribution pre-approved
plans that take into account the requirements of the EGTRRA as well as other
changes in qualification requirements and
guidance beginning February 17, 2005.
The submission period for these pre-approved plans will end January 31, 2006.
The Service will announce the deadline
for timely adoption by employers after
the pre-approved documents have been
reviewed. In addition, the Service intends
to accept applications for determination
letters for individually designed plans
beginning on or after February 1, 2006,
in accordance with a five-year staggered
cycle, and applications for pre-approved
defined benefit plans beginning February 1, 2007. The opening of these programs for individually designed plans and
pre-approved defined benefit plans will be
officially announced at a future date.
As noted in section 2.06, the Service
published the 2004 Cumulative List in Notice 2004–84. The 2004 Cumulative List
reflects law changes under EGTRRA with
technical corrections made by JCWAA, as
well as regulations and guidance published
by the Service that are effective after December 31, 2001. (Prior law changes, as
well as regulations and guidance, effective
on or before December 31, 2001, should
generally have been taken into account in
the GUST opinion or advisory letters issued to pre-approved plans that were in
existence prior to January 1, 2002.) The

2005–10 I.R.B.

changes identified on the 2004 Cumulative List will be considered by the Service
in its review of pre-approved defined contribution plans that must be submitted by
January 31, 2006. However, a plan must
comply with all relevant qualification requirements, not just those on the 2004 Cumulative List. The Service will not review plan language for statutory changes
enacted, or guidance issued, after December 14, 2004, unless it is on the 2004 Cumulative List. Thus, sponsors of defined
contribution pre-approved plans submitting applications during the submission period that will end January 31, 2006, may
not rely on opinion or advisory letters with
respect to statutory changes enacted, or
any guidance issued, after December 14,
2004, unless that guidance is listed on the
2004 Cumulative List.
SECTION 24. REMEDIAL
AMENDMENT PERIOD
.01 Announcement 2004–71, 2004–40
I.R.B. 569, contained a draft revenue
procedure with the Service’s procedures
for issuing letters for pre-approved plans
under a regular, six-year remedial amendment cycle and individually designed
plans under a staggered five-year remedial
amendment cycle. That revenue procedure is expected to be finalized in the near
future. It will extend a plan’s EGTRRA
remedial amendment period to the end of
the applicable cycle. It will also explain
the conditions under which an adopting
employer who timely adopts the pre-approved plan will be treated as having
adopted the plan within the employer’s
six-year remedial amendment cycle, and
which Cumulative List will apply in the
case of plans that become individually designed under the circumstances described
in 24.02 below. The Service will announce
the deadline for timely adoption after the
pre-approved documents have been reviewed, but it is expected that employers
will generally have two years in which to
adopt.
.02 An employer that has adopted an
M&P plan or a VS specimen plan may
have modified the plan in such a way
that the plan, as adopted by the employer,
would not be considered an M&P plan or

2005–10 I.R.B.

a VS plan. Nevertheless, such a plan will
generally be treated as an M&P or VS plan
and will be allowed to remain within the
six-year remedial amendment cycle. Notwithstanding the above, if the employer
has amended the plan to incorporate a type
of plan not allowable in the VS or M&P
program, whichever is applicable, (for
example, to incorporate an ESOP, which
is not allowed in either the M&P or VS
program) the employer’s plan will be considered to be an individually designed plan
for purposes of this revenue procedure. In
that case, the remedial amendment cycle in which the employer impermissibly
amends the VS or M&P plan will remain
the six-year remedial amendment cycle
until that cycle expires. However, the subsequent remedial amendment period is the
five-year remedial amendment cycle.
.03 Notwithstanding any of the above
provisions in .02, the Service may in its
discretion determine that such a plan is
an individually designed plan that will not
receive an extended remedial amendment
cycle, due to the nature and extent of the
amendments.
SECTION 25. EFFECT ON OTHER
DOCUMENTS
Rev. Proc. 2000–20 is modified and superseded. Rev. Proc. 2005–6, Rev. Proc.
2005–8, and Announcement 2001–77,
2001–2 C.B. 83, are modified.
SECTION 26. EFFECTIVE DATE
This revenue procedure is effective
February 17, 2005.
SECTION 27. PAPERWORK
REDUCTION ACT
The collection of information contained in this revenue procedure has been
reviewed and approved by the Office
of Management and Budget in accordance with the Paperwork Reduction Act
(44 U.S.C. 3507) under control number
1545–1674.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless the
collection of information displays a valid
OMB control number.

693

The collection of information in this
revenue procedure is in sections 5.11,
8.02, 11.02, 12, 14.05, 15.02, 18 and 24.
This information is required to enable
the Commissioner, Tax Exempt and Government Entities Division of the Internal
Revenue Service to make determinations
in connection with plan qualification.
This information will be used to determine
whether a plan is entitled to favorable
tax treatment. The likely respondents
are banks, insurance companies, other
financial institutions, law, actuarial and
consulting firms, employee benefit practitioners and employers.
The estimated total annual reporting
and/or recordkeeping burden is 1,058,850
hours.
The estimated annual burden per respondent/recordkeeper varies from 1/2 to
2,000 hours, depending on individual circumstances, with an estimated average
of 3.56 hours. The estimated number
of respondents and/or recordkeepers is
297,750.
The estimated frequency of responses is
occasional.
Books or records relating to a collection
of information must be retained as long
as their contents may become material in
the administration of any internal revenue
law. Generally, tax returns and tax return
information are confidential, as required
by 26 U.S.C. § 6103.
DRAFTING INFORMATION
The principal author of this revenue
procedure is Ingrid Grinde of the Employee Plans, Tax Exempt and Government Entities Division. For further information concerning this revenue procedure, please contact the Employee Plans’
taxpayer assistance telephone service at
1–877–829–5500 between 8:30 a.m. and
6:30 p.m., Eastern Time, Monday through
Friday (a toll-free number). Ms. Grinde
may be reached at (202) 283–9888 (not a
toll-free number).

March 7, 2005

Part IV. Items of General Interest
Notice of Proposed
Rulemaking by
Cross-Reference to
Temporary Regulations
and Notice of Public Hearing
Returns Required on Magnetic
Media
REG–130671–04
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Notice of proposed rulemaking
by cross-reference to temporary regulations and notice of public hearing.
SUMMARY: In this issue of the Bulletin,
the IRS is issuing temporary regulations
(T.D. 9175) relating to the requirements for
filing corporate income tax returns, S corporation returns, and returns of organizations required under section 6033 on magnetic media under section 6011(e) of the
Internal Revenue Code (Code). The text
of those regulations also serves as the text
of these proposed regulations. This document also provides notice of a public hearing on these proposed regulations.
DATES: Written or electronic comments
must be received by February 28, 2005.
Requests to speak (with outlines of topics to be discussed) at the public hearing
scheduled for March 16, 2005, must be received by February 28, 2005.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR
(REG–130671–04),
Room 5203, Internal Revenue Service,
POB 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to: CC:PA:LPD:PR (REG–130671–04),
Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW,
Washington, DC. Alternatively, taxpayers may submit comments electronically via the IRS internet website at
www.irs.gov/regs, or via the Federal
eRulemaking Portal, www.regulations.gov
(IRS-REG–130671–04). The public hearing will be held in the auditorium of the

March 7, 2005

Internal Revenue Building, 1111 Constitution Avenue, NW, Washington, DC 20224.
FOR
FURTHER
INFORMATION
CONTACT: Concerning the proposed regulations, Michael E. Hara, (202) 622–4910
concerning submissions of comments, the
hearing, and/or to be placed on the building access list to attend the hearing, Robin
Jones at (202) 622–7180 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
Background
Temporary regulations in this issue of
the Bulletin amend the Regulations on Procedure and Administration (26 CFR part
301) relating to the filing of corporate income tax returns, S corporation returns,
and returns of organizations required under
section 6033 on magnetic media under section 6011(e). The temporary regulations
require corporations and certain organizations to file their Form 1120, “U.S. Corporation Income Tax Return,” Form 1120S,
“U.S. Income Tax Return for an S Corporation,” Form 990, “Return of Organization Exempt From Income Tax,” and Form
990-PF, “Return of Private Foundation or
Section 4947(a)(1) Nonexempt Charitable
Trust Treated as a Private Foundation,”
electronically if they are required to file at
least 250 returns during the calendar year
ending with or within their taxable year.
The text of those regulations also serves as
the text of these proposed regulations. The
preamble to the temporary regulations explains the amendments.
Special Analyses
It has been determined that these proposed regulations are not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5)
does not apply to these regulations. Because these regulations do not impose a
collection of information on small entities,
the Regulatory Flexibility Act (5 U.S.C.
chapter 6) does not apply. The IRS and
Treasury Department note that these regulations only prescribe the method of fil-

694

ing returns that are already required to be
filed. Further, these regulations are consistent with the requirements imposed by
statute.
Section 6011(e)(2)(A) provides that,
in prescribing regulations providing standards for determining which returns must
be filed on magnetic media or in other machine-readable form, the Secretary shall
not require any person to file returns on
magnetic media unless the person is required to file at least 250 returns during
the calendar year. Consistent with the
statutory provision, these regulations do
not require Forms 1120, Forms 1120S,
Forms 990, or Forms 990-PF to be filed
electronically unless 250 or more returns
are required to be filed.
Further, if a taxpayer’s operations are
computerized, reporting in accordance
with the regulations should be less costly
than filing on paper. If the taxpayer’s operations are not computerized, the incremental cost of filing Forms 1120, Forms
1120S, Forms 990, and Forms 990-PF
electronically should be minimal in most
cases because of the availability of computer service bureaus. In addition, the
proposed regulations provide that the IRS
may waive the electronic filing requirements upon a showing of hardship.
Pursuant to section 7805(f) of the Code,
these proposed regulations will be submitted to the Chief Counsel for Advocacy
of the Small Business Administration for
comment on their impact on small business.
Comments and Public Hearing
Before these proposed regulations are
adopted as final regulations, consideration
will be given to any written (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS.
The IRS and Treasury Department request
comments on the clarity of the proposed
regulations and how they can be made
easier to understand. The IRS and Treasury Department also request comments
on the procedures and criteria for hardship
waivers from the electronic filing requirements. The IRS and Treasury Department
also request comments on the accuracy of
the certification that the regulations in this
document will not have a significant eco-

2005–10 I.R.B.