SECTION 9. ADVISORY — Internal Revenue Bulletin 2003-1

LETTER AND DETERMINATION LETTER FILING PROCEDURES FOR M&P AND VOLUME SUBMITTER PLANS

(4) Adopting employers of nonstandardized safe harbor M&P plans (which require adopting employers to elect a safe harbor allocation or benefit formula) are entitled to the same reliance as adopting employers of nonstandardized plans except that they have automatic reliance with respect to the nondiscriminatory amounts requirement if they elect a safe harbor definition of compensation.

.04 The following conditions and limitations apply with respect to standardized and nonstandardized M&P plans as well as volume submitter plans.

(1) An adopting employer of an M&P or volume submitter plan can rely on a favorable opinion or advisory letter only if the letter has taken into account the requirements of GUST and the plan has been amended to the extent necessary to comply with the requirements of section 314(e) of CRA, relating to changes to the definition of compensation under §§ 414(s) and 415(c)(3). In addition, if the opinion or advisory letter is a “GUST I” letter (as defined in Rev. Proc. 2000–27), the plan must have been amended to the extent necessary to comply with the requirements of GUST that are effective after 1998.

(2) 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 satisfies the qualification requirements as in effect prior to GUST and the operational compliance requirements of GUST, and the GUST amendments are retroactively effective to the extent required.

(3) An adopting employer cannot rely on an opinion or advisory letter for a plan if the repealed family aggregation rules continued to apply under the plan after 1996 or if the repealed § 415(e) limits continued to apply under the plan after 1999. The continued application of these rules and limits in years following their repeal could cause a plan to fail to satisfy one or more requirements of § 401(a).

(4) An adopting employer cannot rely on an advisory letter issued after the date the employer adopts the GUST-amended plan.

(5) An adopting employer can rely on an opinion or advisory letter only if the employer has not added any terms to the approved M&P or volume submitter plan document and has not modified or deleted any terms of the document other than choosing options permitted under the document or, in the case of an M&P plan, amending the document as permitted under sections 5.07 and 5.11 of Rev. Proc. 2000–20. Thus, for example, in the case of a volume submitter 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.

(6) 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.

.05 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 this revenue procedure, regarding the effect of a determination letter, and section 5.01(4) of Rev. Proc. 2002–47, 2002–29 I.R.B. 133, regarding the definition of “favorable letter” for purposes of the Employee Plans Compliance Resolution System.

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Scope .01 This section contains procedures for requesting advisory letters and determination letters for volume submitter plans and determination letters for M&P plans.

Description of volume submitter program

Definition of volume submitter plan

.02 Under the volume submitter program, a practitioner who qualifies may request the Service to issue an advisory letter regarding a volume submitter specimen plan. A specimen plan is a sample plan of a practitioner (rather than the actual plan of an employer) that contains provisions that are identical or substantially similar to the provisions in plans that such practitioner’s clients have adopted or are expected to adopt. A specimen plan may include an adoption agreement. A specimen plan may include blanks or fill-in provisions for the employer to complete only if the plan also includes parameters on these provisions that preclude an employer from completing them in a manner that could violate the qualification requirements. Once the Service has approved the specimen plan, employers who adopt the same plan and meet the conditions described in section 8 of this revenue procedure will be able to rely on the advisory letter to the extent provided in section 8. In addition, the practitioner will be able to file determination letter requests on behalf of employers adopting substantially similar plans who need a determination letter to have reliance or who otherwise desire a determination letter.

.03 A volume submitter plan is a profit-sharing plan (without a § 401(k) arrangement), a profit-sharing plan (with a § 401(k) arrangement), a money purchase pension plan, or a defined benefit plan that is submitted under the procedures described in this section 9 for filing requests for volume submitter advisory letters (with respect to the specimen plan) and requests for determination letters (with respect to an employer’s adoption of a plan that is substantially similar to an approved specimen plan). The Service will not accept volume submitter requests with respect to ESOPs or other stock bonus plans, cash balance or similar defined benefit plans, or plans that include so-called fail-safe provisions for § 401(a)(4) or the average benefit test under § 410(b). The Service may decline to accept volume submitter requests for other types of plans not described in this section 9.03.

Incorporation by reference .04 Incorporation by reference in a volume submitter plan is subject to the limits described in sections 5.18 and 8.03 of Rev. Proc. 2000–20.

User fees .05 Rev. Proc. 2003–8 provides reduced user fees for requests under the volume submitter program if certain requirements are satisfied. For adopting employers to be entitled to file a request for a determination letter with the lower fees, the volume submitter practitioner must certify at the time of filing a request for an advisory letter for the specimen plan that at least 30 employers are expected to adopt plans that are substantially similar in form to the specimen plan. Also, the volume submitter practitioner must be a representative of the employer when the employer’s determination letter application is filed. Although the volume submitter is not required to submit a list of adopting employers, the Service reserves the right to request such a list. Reduced user fees also apply to advisory letter applications for volume submitter specimen plans that are identical to volume submitter lead specimen plans. See section 17.02 of Rev. Proc. 2000–20.

Advisory letter for specimen plan

.06 With respect to advisory letters for volume submitter specimen plans:

(1) A request for approval of a volume submitter specimen plan must be sent to the volume submitter coordinator for EP Determinations at the following address:

Internal Revenue Service P.O. Box 2508 Cincinnati, OH 45201 Attn: VSC Coordinator Room 5106

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A request shipped by Express Mail or a delivery service should be sent to:

Internal Revenue Service 550 Main Street Cincinnati, OH 45202 Attn: VSC Coordinator Room 5106

(2) The request for approval must include the following:

(a) A copy of the specimen plan, including adoption agreement, if applicable, and any related specimen trust instrument;

(b) A cover letter requesting approval that includes the certification described in section 9.05 above and indicates the type of plan for which approval is being requested;

(c) The required user fee submitted with Form 8717, User Fee for Employee Plan De- termination Letter Request ; and

(d) An index/table of contents listing the location of all variable sections.

(3) For procedures regarding volume submitter lead specimen plans, see section 17.02 of Rev. Proc. 2000–20.

Requests for information .07 The Service may, at its discretion, require any additional information it considers necessary to the issuance of a favorable advisory letter. If a letter requesting changes to the specimen plan is sent to the volume submitter practitioner or authorized representative, a response addressing each requested change 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 advisory letter application may be considered withdrawn. An extension of the 30-day time limit will only be granted for reasonable cause. The Service may return to the applicant any request for an advisory letter if it determines the application is so deficient that it cannot be reviewed in a reasonable amount of time.

Inadequate submissions .08 The Service will return, without further action, applications for advisory letters for 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 volume submitter practitioner is notified of such inadequacy.

Determination letter for adoption of volume submitter plan

.09 With respect to determination letters for volume submitter plans:

(1) A request for a determination letter for an employer’s adoption of an approved volume submitter plan must be sent to the address provided in section 6.18.

(2) The request for a determination letter must include the following:

(a) Form 5307, Application for Determination for Adopters of Master or Prototype or Volume Submitter Plans (Schedule Q is optional);

(b) Form 2848, Power of Attorney and Declaration of Representative, or other written authorization allowing the volume submitter practitioner to act as a representative of the employer with respect to the request for a determination letter;

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Determination letter for adoption of M&P plan

(d) A copy of the plan and trust instrument or, if the employer has made no changes to the specimen plan and trust other than completing options permitted under the adoption agreement, a copy of the completed adoption agreement;

(e) A written representation made by the volume submitter practitioner which:

(i) states whether the plan and trust instrument are word-for-word identical to the approved specimen plan;

(ii) if the plan and trust are not word-for-word identical to the approved specimen plan, explains how the plan and trust instrument differ from the approved specimen plan, describing the location, nature and effect of each deviation from the language of the approved specimen plan; and

(iii) if the latest advisory letter for the approved specimen plan does not consider all the changes made by GUST, states that the plan satisfies all requirements of GUST, including those first effective in plan years beginning after December 31, 1998, and identifies those deviations from the language of the approved specimen plan that are intended to satisfy specific GUST requirements;

(f) A copy of the plan’s latest favorable determination letter, if applicable; and

(g) Any other information or material that may be required by the Service.

(3) Deviations from the language of the approved specimen plan will be evaluated based on the extent and complexities of the changes. If the changes are determined not to be compatible with the volume submitter program, the Service may require the applicant to file Form 5300 and pay the higher user fee.

(4) An employer will not be treated as having adopted a volume submitter plan if the employer has signed or otherwise adopted the plan prior to the date on the volume submitter specimen plan’s advisory letter. In this case, the determination letter application for the employer’s plan may not be filed on Form 5307 and will not be eligible for a reduced user fee. A determination letter application for a volume submitter plan must be based on the approved volume submitter specimen plan with any applicable modifications.

.10 Form 5307 must be filed to request a determination letter for the adoption of an M&P plan. Schedule Q may be filed as an attachment to Form 5307.

Required information .11 The determination letter request must include the following:

(1) An adoption agreement showing which elections the employer is making with respect to the elective provisions contained in the plan;

(2) A copy of the plan’s most recent opinion letter; and

(3) In the case of a determination letter request for an M&P plan that uses a separate trust or custodial account, a copy of the employer’s trust or custodial account document.

Amended plan is treated as an individually-designed plan

Requests made prior to the issuance of opinion letter

.12 An employer that amends any provision of an M&P plan or its adoption agreement (other than to choose among the options offered by the sponsor if the plan permits or contemplates such options), or an employer that chooses to discontinue participation in such a plan as amended by its sponsor and does not substitute another approved plan referred to in this section is considered to have adopted an individually-designed plan. The requirements stated in this revenue procedure relating to the issuance of determination letters for individually-designed plans will then apply to such plan.

.13 An application submitted by an employer with respect to an M&P plan will be treated as an application for an individually-designed plan if it is submitted prior to the time the M&P plan is approved. Also see sections 5.14 and 18.06 of Rev. Proc. 2000–20 regarding the requirement that employers sign new adoption agreements when M&P plans are restated.

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