SECTION 15. APPROVED PLANS

• MAINTENANCE OF APPROVED STATUS

.01 Cumulative List in Six-Year Cycle

• Rev. Proc 2007–44 provides that practitioners of pre-approved VS plans must submit requests for advisory letters during the applicable on-cycle submission period for 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 of this revenue procedure. The Service will review the plans that have been submitted during the applicable on-cycle submission period for 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 in operation with all relevant qualification requirements, not just those on the applicable Cumulative List.

.02 Subsequent Required Interim 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. See section 5.01 of Rev. Proc. 2007–44 regarding the time by which such amendments must be adopted. Failure to so amend could result in the loss of a plan’s qualified status. However, this does not change the applicable on-cycle submission period for 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 that, to the best of the practitioner’s knowledge, continues to maintain the plan as a VS plan amends its plan when necessary.

The plan must operationally comply with any changes in qualification re

quirements and the terms of the plan as ultimately amended to reflect the changes.

.03 Option to Permit Practitioner Amendment - A VS practitioner may amend its specimen 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 Service (including model and sample 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 for practitioner amendment must provide that, for purposes of reliance on the advisory letter, the practitioner will no longer have the authority to amend the plan on behalf of the adopting employer as of the date of the adoption of an employer amendment to the plan to incorporate a type of plan not allowable in the VS program described in section 16.03 ( e.g., the addition of an ESOP) or as of the date the Service notifies the practitioner that the plan is being treated as an individually designed plan pursuant to section 24.03.

.04 Responsibilities of Practitioner A VS practitioner 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. 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.

.05 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 EPCRS, it is incumbent on the practitioner to notify the employer that the plan may no longer be qualified, advise the employer that adverse

2011–44 I.R.B. 621 October 31, 2011

(9) Church plans described in § 414(e) that have not made the election provided by § 410(d);

(10) Governmental plans that include so-called “DROP” provisions or similar provisions;

(11) Plans under which the § 415 limitations are incorporated by reference;

(12) Plans that incorporate the ADP test under § 401(k)(3) or the ACP test under § 401(m)(2) by reference;

(13) Section 401(k) plans that provide for hardship distributions under circumstances not 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;

(14) Fully-insured § 412(e)(3) plans, other than plans that, by their terms, satisfy the safe harbor in § 1.401(a)(4)–3(b)(5);

(15) Plans that fail to contain a provision reflecting the requirements of § 414(u) (see Rev. Proc. 96–49);

(16) Plans that include so-called failsafe provisions for § 401(a)(4) or the average benefit test under § 410(b);

(17) 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;

(18) Plans designed to satisfy the provisions of § 105;

(19) Plans that include § 401(h) accounts;

(20) Eligible combined plans within the meaning of § 414(x)(2).

The Service may, in its discretion, decline to issue advisory letters for other types of plans not described in this section 16.03.