SECTION 2. BACKGROUND

.01 The procedures of the Service on the issuance of opinion and advisory letters regarding the acceptability of the form of pre-approved plans are set forth in Rev. Proc. 2005–16, as modified. This revenue procedure modifies and supersedes Rev. Proc. 2005-16.

.02 Revenue Procedure 2011–6, 2011–1 I.R.B. 195, sets forth the general procedures of the Service on the issuance of employee plans determination letters including determination letters for M&P and VS plans.

.03 Revenue Procedure 2007–44, (as modified by Rev. Proc. 2008–56, 2008–2 C.B. 826; Rev. Proc. 2009–36, 2009–2 C.B. 304; Notice 2009–97, 2009–2 C.B. 972; and Notice 2010–48, 2010–27 I.R.B 9), describes a system of cyclical remedial amendment periods under the Code. Under this system, every individually designed plan qualified under § 401(a) or 403(a) has a regular, five-year remedial amendment cycle, staggered and spread over five-year periods, so that different categories of plans have different cycles. The effect of this system is that plan sponsors may apply for new determination letters generally only once every five years in order to continue to have a letter on which to rely. In addition, under this system every pre-approved plan generally has a regular, six-year remedial amendment cycle. Every pre-approved plan must be submitted to the Service for a new opinion or advisory letter every six years, during the applicable on-cycle submission period at the beginning of the plan’s six-year cycle. Pre-approved defined contribution

1 Applications for determination letters for Cycle A individually designed plans are accepted from February 1, 2011 to January 31, 2012.

2 This deadline was extended by Notice 2010–48 for plans affected by certain federally declared disasters. In addition, certain plans such as Cycle E plans, Cycle D plans with a plan year ending on or after February 1, 2010, and governmental plans filing in Cycle E had a deadline of January 31, 2011, as explained in the Service’s Summer 2010 Retirement News for Employers.

2011–44 I.R.B. 609 October 31, 2011

(7) The procedures for requesting advisory letters for VS plans are revised to refer to the applicable Form 4461, Form 4461–A, Form 4461–B, and Form 8717 (and to specify what to include until these forms are revised) and to require that the practitioner’s and mass submitter’s certification regarding interim amendments be submitted as part of the application (sections 17 and 18)

(8) The procedures for requesting advisory letters for VS plans are revised to clarify when separate specimen plans and applications are required for different categories of plans and to specify that a governmental plan ( i.e., a plan described in § 414(d)) is one of the categories of plans that requires a separate specimen plan. (section 17)

.04 The revenue procedure makes the following changes applicable to all preapproved plans:

(1) The revenue procedure is modified to: (a) clarify the types of employer modifications and amendments to a plan that will not cause the plan to fail to be identical to an approved M&P or VS plan; (b) provide that an employer or sponsor may adopt interim or discretionary amendments for which the remedial amendment cycle ends later than the remedial amendment cycle to which the opinion or advisory letter applies; (c) provide that an employer may adopt model or sample amendments that the Service has indicated will not cause the plan to be treated as an individually designed plan; and (d) delete provisions under Rev. Proc. 2005–16 that provided that the employer could modify or amend the plan to correct typographical errors and/or cross references. (section 19.03) (2) The address to which applications for opinion and advisory letters should be submitted is updated. (section 20)

(3) The revenue procedure is modified to clarify the circumstances under which an opinion or advisory letter is nontransferable to another entity. (section 20.09)

(4) The revenue procedure is modified to clarify that plans must be amended to comply with statutory and regulatory changes pursuant to Rev. Proc. 2007–44 and to clarify that the amendments do not change the applicable on-cycle submission period for the six-year cycle during which sponsors or practitioners must request opinion or advisory letters. The

amendment cycle for pre-approved defined contribution and defined benefit plans, and provides that as of February 1, 2011, the Service began accepting applications for pre-approved defined contribution plans. (sections 1 and 2)

.02 The revenue procedure makes the following changes to the M&P pre-approved plan program:

(1) The definition of M&P mass submitter is clarified to provide that a mass submitter may be counted as one of the 30 unaffiliated sponsors required for purposes of determining whether this sponsorship requirement is met without needing to submit a separate opinion letter application (Form 4461-B) on behalf of that mass submitter. The mass submitter may also be counted as a sponsor under the special rule for mass submitters that received a favorable opinion letter (submitting applications on behalf of 10 sponsors) under the Tax Reform Act of 1986, Public Law 99–514 (100 Stat. 2481) (TRA ’86). (section 4.08)

(2) The National Sponsor category is deleted. (section 4)

(3) The effect of employer amendments on pre-approved plan status is clarified. (sections 5.01 and 5.02)

(4) The list of areas not covered by opinion letters is expanded to include: hybrid plans; plans with section 401(h) accounts; and plans under section 414(x). (section 6.03)

(5) The revenue procedure provides that opinion letters will now be issued for multiple employer plans, by deleting this category from the list of areas not covered by opinion letters. (section 6.03)

(6) The procedures for requesting opinion letters are revised to refer to the applicable Form 4461, Form 4461–A, Form 4461–B, and Form 8717 (and to specify what to include until these forms are revised), and to require that the sponsor’s certification regarding interim amendments be submitted as part of the application. (sections 7.02 & 12.01)

(7) The description of the six-year remedial amendment cycle and other amendment requirements are updated to conform to the interim amendment requirements (including deleting former section 8.03 regarding a special one-year rule to amend following the issuance of a revenue ruling or other guidance). (section 8)

(8) Provisions are added to clarify that a pre-approved M&P plan becomes an individually designed plan if a request for an opinion letter is withdrawn, unless the employer adopts another pre-approved plan. (section 9.01)

(9) Provisions are added to clarify that an M&P mass submitter amending its plan should submit a restated plan during the applicable on-cycle submission period for the next six-year cycle, rather than submitting the amendments between submission periods and to state that the M&P mass submitter must provide copies of the amendments to sponsors who have adopted the plan. (section 12.04)

.03 The revenue procedure makes the following changes to the VS pre-approved plan program:

(1) Language is added to clarify that each adoption agreement counts as one specimen plan for purposes of the 30-employer requirement (or 10, if applicable). (section 13.05)

(2) The revenue procedure is clarified to provide that a VS mass submitter may be counted as one of the 30 unaffiliated sponsors for purposes of determining whether this sponsorship requirement is met without needing to submit a separate advisory letter application (Form 4461-B) on behalf of that mass submitter. (section 13.06)

(3) The provisions required for VS plans with an adoption agreement format are specified. (section 14.05)

(4) The revenue procedure removes the rule under which a VS practitioner’s authority to amend on behalf of an adopting employer is conditioned on the plan being covered by a favorable determination letter (if the employer is required to obtain a determination letter in order to have reliance), and clarifies other provisions with respect to the practitioner’s authority to amend on behalf of an adopting employer. (sections 15.03 and 15.05)

(5) The revenue procedure is clarified to provide that the responsibilities of a VS practitioner apply to VS practitioners generally, not just those practitioners authorized to adopt plan amendments on behalf of employers. (section 15.04)

(6) The list of areas not covered by advisory letters is expanded to include: hybrid plans; plans with section 401(h) accounts; and plans under section 414(x). (section 16)

October 31, 2011 610 2011–44 I.R.B.

(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 adopt the sponsor’s basic plan document. The deadline for timely adoption will be announced by the Service in future guidance.

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 preceding two paragraphs, 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), a person represents to the Service that it is a sponsor, as defined in this section 4.07, and agrees to comply with any requirements imposed on sponsors by this revenue procedure. Failure to comply with these requirements may result in the

revenue procedure further provides that interim amendments adopted by a pre-approved sponsor or practitioner on behalf of adopting employers must be provided to the adopting employers, and the date of the adoption must be provided with the amendments. It also states that the Service may in its discretion request copies of interim amendments that the sponsor or practitioner has adopted on behalf of all adopting employers. (section 21.01)

(5) Rules for submitting word-for-word identical plans and off-cycle filings have been clarified and updated. (section 21.03)

(6) Reasons for which an advisory or opinion letter may be revoked are clarified. (section 22)

(7) The revenue procedure describes the applicable on-cycle submission period for the second six-year cycle and extends the deadline to submit applications for opinion and advisory letters for sponsors and practitioners maintaining defined contribution mass submitter plans from October 31, 2011 to January 31, 2012. It also updates the description of the remedial amendment period, and provides guidance for the next cycle. (sections 23 and 24)